RT Generic
T1 The effect of earned vs. house money on price bubble formation in experimental asset markets
A1 Corgnet, Brice
A1 Hernán, Roberto
A1 Kujal, Praveen
A1 Porter, David
A2 Universidad Carlos III de Madrid. Departamento de Economía, 
AB Can “house money” explain asset market bubbles? We test this hypothesis in an assetexperiment with a certain dividendcash and shares is given to subjectsinitial portfolios are constructed using subjectthat bubbles still occur; however trading volumes are significantly abated and the dispersionof earnings is significantly lower when subjects earn their starting endowments. Weinvestigate the role of cognitive ability in accounting for the differences in earningsdistribution across treatments by using the Cognitive Reflection Test (CRT). We find thathigh CRT subjects earned more money on average than the initial value of their portfoliowhile low CRT subjects earned less. Subjects with low CRT scores were net purchasers(sellers) of shares when the price was above (below) fundamental value while the oppositewas true for subjects with high CRT scores.
SN 2340-5031
YR 2013
FD 2013-02
LK https://hdl.handle.net/10016/16384
UL https://hdl.handle.net/10016/16384
LA eng
DS e-Archivo
RD 21 jul. 2024