Learning from unrealized versus realized prices

Arbeitspapier

Our market experiment investigates the extent to which traders learn from the price, differentiating between situations where orders are submitted before versus after the price has realized. When market participants have to submit their bids conditional on the price, they show a bias by reacting only to their private information and not to the hypothetical value of the price. In a sequential trading mechanism, where the price is known at the bid submission, bids react to price to an extent that is roughly consistent with the benchmark theory.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DIW Discussion Papers ; No. 1487

Classification and Topics

• Classification: Wirtschaft ; Asymmetric and Private Information; Mechanism Design ; Criteria for Decision-Making under Risk and Uncertainty ; Design of Experiments: Laboratory, Individual
• Subject: Naive Expectations ; Asymmetric Information ; Rational Expectations ; Sequential Markets

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ngangoue, Kathleen ; Weizsäcker, Georg
• Event: Veröffentlichung
• (who): Deutsches Institut für Wirtschaftsforschung (DIW)
• (where): Berlin
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/110964
• Last update: 10.03.2025, 11:42 AM CET