Heterogeneous expectations in experimental asset markets

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dc.contributor.advisorFullbrunn, S.
dc.contributor.authorJong, Erwin, de
dc.date.issued2016-12-21
dc.description.abstractBeliefs play a fundamental role in economic choices and aggregate market outcomes. A substantial theoretical literature argues that the disagreement among investors about the value of assets is responsible for price bubbles in financial markets. So far, no study was able to directly proof this line of theory, neither in secondary data analysis nor in experimental studies. Contrary to prior studies, we use a direct test of this relationship by varying the belief dispersion in Smith et al. (1988) markets. Using a novel experimental treatment, we allocate subjects into markets based on their elicited beliefs of future prices prior to trading. Our results suggest that heterogeneous beliefs are related to more pronounced price bubbles, while there is no effect on trade volume and share concentration. We further find that beliefs are positively related to risk aversion.en_US
dc.identifier.urihttp://theses.ubn.ru.nl/handle/123456789/3889
dc.language.isoenen_US
dc.thesis.facultyFaculteit der Managementwetenschappenen_US
dc.thesis.specialisationFinancial Economicsen_US
dc.thesis.studyprogrammeMaster Economicsen_US
dc.thesis.typeMasteren_US
dc.titleHeterogeneous expectations in experimental asset marketsen_US
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