Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/220002
Authors: 
Sornette, Didier
Andraszewicz, Sandra
Wu, Ke
Murphy, Ryan O.
Rindler, Philipp
Sanadgol, Dorsa
Year of Publication: 
2020
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [ISSN:] 1864-6042 [Year:] 2020 [Volume:] 14 [Issue:] 2020-20 [Pages:] 1-53
Abstract: 
To study coordination in complex social systems such as financial markets, the authors introduce a new prediction market set-up that accounts for fundamental uncertainty. Nonetheless, the market is designed so that its total value is known, and thus its rationality can be evaluated. In two experiments, the authors observe that quick consensus emerges early yielding pronounced mispricing, which however does not show the standard 'bubble-and-crash'. The set-up is implemented within the xYotta collaborative platform (https://xyotta.com). xYotta's functionality offers a large number of extensions of various complexity such as running several parallel markets with the same or different users, as well as collaborative project development in which projects undergo the equivalent of an IPO (initial public offering) and whose subsequent trading matches the role of financial markets in determining value. xYotta is thus offered to researchers as an open source software for the broad investigation of complex systems with human participants.
Subjects: 
experimental asset market
prediction market
uncertainty
experimental economics
JEL: 
C90
D47
D80
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Article

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