RT Generic
T1 The effect of reliability, content and timing of public announcements on asset trading behavior
A1 Corgnet, Brice
A1 Kujal, Praveen
A1 Porter, David
A2 Universidad Carlos III de Madrid. Departamento de Economía, 
AB Financial 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.
SN 2340-5031
YR 2010
FD 2010-03
LK http://hdl.handle.net/10016/7577
UL http://hdl.handle.net/10016/7577
LA eng
DS e-Archivo
RD 27 abr. 2024