Nonspeculative Bubbles in Experimental Asset Market. Lei, Noussair and Plott (2001). Presented by Huanren (Warren) Zhang. Outlines. Introduction to Bubbles Research Questions: Why do bubbles occur ? Speculative Hypothesis Active Participation Hypothesis Experimental Design Results
Lei, Noussair and Plott (2001)
Presented by Huanren(Warren) Zhang
The volume of trading is significantly reduced in the two-market treatment. The volume of trades falls by about 35% when a second market is introduced (Table IV).
However, bubbles are still observed and median prices are not significantly affected by the introduction of a second market.
Thus, the data supports the Active Participation Hypotheses, but this hypothesis cannot explain the pricing patterns in bubbles.Results for TwoMkt Sessions