The Role of the End Time in Experimental Asset Markets
45 Pages Posted: 22 Jul 2021 Last revised: 25 Apr 2022
Date Written: July 19, 2021
By now there are hundreds of scientific articles on experimental asset markets. Almost all of these experiments use a short and definite horizon. This may be one of the starkest differences to financial asset markets outside the laboratory, which usually have indefinite and comparatively long horizons. We analyze the role of the end time in an asset market experiment in which we vary the length of the horizon and whether the end time is definite or indefinite. We find recurring bubbles and similar price dynamics in all treatments (with moderately lower prices in the treatments with a long horizon).
Keywords: Experimental finance; asset market experiments; time horizon; indefinite end time; bubbles.
JEL Classification: C92, G40, G41, D90
Suggested Citation: Suggested Citation