Publication:
The effect of reliability, content and timing of public announcements on asset trading behavior

Simple item page
dc.affiliation.dptoUC3M. Departamento de Economíaes
dc.contributor.authorCorgnet, Brice
dc.contributor.authorKujal, Praveen
dc.contributor.authorPorter, David
dc.contributor.editorUniversidad Carlos III de Madrid. Departamento de Economía
dc.date.accessioned2010-04-06T10:53:48Z
dc.date.available2010-04-06T10:53:48Z
dc.date.issued2010-03
dc.description.abstractFinancial markets are overwhelmed by daily announcements. We use experimental asset markets to assess the impact of releasing public messages with different levels of reliability on asset prices. Subjects receive qualitative announcements in predetermined trading periods that are either preset by the experimenter, randomly selected, or determined by past asset market prices. We find that messages can play a significant role in bubble abatement, or rekindling. The preset message, “The price is too high,” decreases the amplitude and duration of bubbles for inexperienced subjects. Announcements that depend on the actual level of mispricing reduce bubble magnitude. Meanwhile, a preset or random message, “The price is too low,” prevents experienced subjects from abating bubbles. We account for the effect of public messages by showing that they significantly reduce inconsistent (“irrational”) trading behavior.
dc.format.mimetypeapplication/pdf
dc.identifier.issn2340-5031
dc.identifier.repecwe101204
dc.identifier.urihttp://hdl.handle.net/10016/7577
dc.language.isoeng
dc.relation.hasversionhttp://hdl.handle.net/10016/14957
dc.relation.ispartofseriesUC3M Working papers. Economics
dc.relation.ispartofseries10-04
dc.rightsAtribución-NoComercial-SinDerivadas 3.0 España
dc.rights.accessRightsopen access
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.ecienciaEconomía
dc.subject.jelC92
dc.subject.jelG12
dc.subject.otherExperimental asset markets
dc.subject.otherBubbles
dc.subject.otherMarket communications
dc.subject.otherBounded rationality
dc.titleThe effect of reliability, content and timing of public announcements on asset trading behavior
dc.typeworking paper*
dspace.entity.typePublication
Files
Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
we101204.pdf
Size:
389.67 KB
Format:
Adobe Portable Document Format
Description:
Download
Collections
DE - Working Papers. Economics. WE
Economists Online