Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/128340
Authors: 
Farjam, Mike
Kirchkamp, Oliver
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper 5631
Abstract: 
Bubbles are omnipresent in lab experiments with asset markets. Most of these experiments were conducted in environments with only human traders. Today markets are substantially determined by algorithmic traders. Here we use a laboratory experiment to measure changes of human trading behavior if these humans expect algorithmic traders. To disentangle the direct effect of algorithmic traders we use a design where we manipulate only the expectations of human traders. We find clearly smaller bubbles if human traders expect algorithmic traders to be present.
Subjects: 
bubbles
expectations
experiment
algorithmic traders
JEL: 
C92
G02
Document Type: 
Working Paper

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