The Role of the End Time in Experimental Asset Markets

Abstract

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 very similar price dynamics with recurring bubbles in all treatments.

Keywords: Experimental finance, asset market experiments, time horizon, indefinite end time, bubbles

JEL Classification: C92, G40, G41, D90