Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/184982
Authors: 
Weitzel, Utz
Huber, Christoph
Lindner, Florian
Huber, Jürgen
Rose, Julia
Kirchler, Michael
Year of Publication: 
2018
Series/Report no.: 
Working Papers in Economics and Statistics 2018-04
Abstract: 
The efficiency of financial markets and their potential to produce bubbles are central topics in academic and professional debates. Yet, surprisingly little is known about the contribution of financial professionals to price efficiency. To close this gap, we run 86 experimental markets with 294 professionals and 384 students. We report that professional markets with bubble-drivers-capital inflows or high initial capital supply-are susceptible to bubbles, but they are significantly more efficient than student markets. In a survey with 245 professionals and students we show that cognitive skills and risk attitudes do not explain subject pool differences in bubble formation.
Subjects: 
experimental finance
financial professionals
price efficiency
financial bubbles
JEL: 
C92
D84
G02
G14
Document Type: 
Working Paper

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