Price patterns in experimental asset markets with long horizon

Research output: Contribution to journalArticlepeer-review


We investigate the generality of the bubble and crash price pattern observed in previous asset market experiments. The deviation of prices from fundamental values can be explained by either a failure of subjects to backward induct, a learning effect, or some other explanation. We conduct experiments with a longer horizon of 200 periods to find a possible reason for the timing of the crash. If the reason for the crash is the inability of subjects to backward induct, a long bubble should be observed. If, on the other hand, it is a learning effect, then the crash should occur after approximately 13 periods. Our results show that while prices generally deviate from fundamental values, price patterns are different than in the 15-period markets, featuring multiple bubbles and crashes.

Original languageEnglish
Pages (from-to)20-28
Number of pages9
JournalJournal of Behavioral Finance
Issue number1
StatePublished - 1 Dec 2011


  • Bubbles and crashes
  • Experimental asset markets
  • Price formation
  • Price patterns

All Science Journal Classification (ASJC) codes

  • Experimental and Cognitive Psychology
  • Finance


Dive into the research topics of 'Price patterns in experimental asset markets with long horizon'. Together they form a unique fingerprint.

Cite this