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Only Paul Could Go To Changchun

Symmetric Information Bubbles: Experimental Evidence

10/8/2017

 
Here.

This study experimentally analyzes tradersíchoices, with and without asymmetric information, based on the riding-bubble model. While asymmetric information has been necessary to explain a bubble in past theoretical models, our experiments show that traders have an incentive to hold a bubble asset for longer, thereby expanding the bubble in a market with symmetric, rather than asymmetric information. This Önding implies a possibility that information symmetry promotes cooperation. However, when traders are more experienced, the size of the bubble decreases, in which case bubbles do not arise, even with symmetric information.


From:

Yasushi Asako
Yukihiko Funaki
Kozo Ueda
Nobuyuki Uto

Waseda University


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