Speculative Bubbles - An introduction and application of the Speculation Elicitation Task (SET)

Janssen, Dirk-Jan and Weitzel, Utz and Füllbrunn, Sascha (2015): Speculative Bubbles - An introduction and application of the Speculation Elicitation Task (SET).

Abstract

We introduce the speculation elicitation task (SET) to measure speculative tendencies of individuals. The resulting SET-score allows us to investigate the role of individual speculative behavior on experimental asset market bubbles. The experimental results show that overpricing in asset markets composed of subjects with a high propensity to speculate (high SET-score) is significantly higher than in markets composed of subjects with a low propensity to speculate (low SET-score). We conclude that speculative tendencies are an important driver of price bubbles in experimental asset markets.

• Item Type: MPRA Paper
• Language: English
• Keywords: Speculation, Experimental Asset Markets, Finance
• Subjects: C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C90 - General; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D40 - General; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D84 - Expectations ; Speculations; G - Financial Economics > G1 - General Financial Markets > G10 - General

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