Bubbles and experience: An experiment with a steady inflow of new traders

• Autores: Huan Xie, Jipeng Zhang
• Localización: Southern Economic Journal, ISSN 0038-4038, ISSN-e 2325-8012, Vol. 82, Nº. 4, 2016, págs. 1349-1373
• Idioma: inglés
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• Resumen

  • We revisit the effect of traders' experience on price bubbles by introducing either one-third or two-thirds steady inflow of new traders in each of four consecutive experimental asset markets. We find that bubbles are still reduced in the treatments with a steady inflow of new traders, but at a slower pace compared to the baseline treatment in which new traders are only introduced in the last market. Our analysis of individual trading behavior shows that the slower abatement of bubbles in the inflow treatments can be attributed mainly to the inexperienced traders who make more mistakes than experienced traders.