(A)symmetric Information Bubbles: Experimental Evidence

Yasushi Asako (), Yukihiko Funaki (), Kozo Ueda and Nobuyuki Uto

No 312, Globalization Institute Working Papers from Federal Reserve Bank of Dallas

Abstract: Asymmetric information has been necessary to explain a bubble in past theoretical models. This study experimentally analyzes traders? choices, with and without asymmetric information, based on the riding-bubble model. We show that traders have an incentive to hold a bubble asset for longer, thereby expanding the bubble in a market with symmetric, rather than asymmetric information. However, when traders are more experienced, the size of the bubble decreases, in which case bubbles do not arise, with symmetric information. In contrast, the size of the bubble is stable in a market with asymmetric information.

JEL-codes: C72 D82 D84 E58 G12 G18 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2017-04-01
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-gth and nep-mac
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Related works:
Journal Article: (A)symmetric information bubbles: Experimental evidence (2020)
Working Paper: (A)symmetric Information Bubbles: Experimental Evidence (2019)
Working Paper: Symmetric information bubbles: Experimental evidence (2017)
Working Paper: Symmetric Information Bubbles: Experimental Evidence (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:feddgw:312

DOI: 10.24149/gwp312

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