Oechssler, Jörg ; Schmidt, Carsten ; Schnedler, Wendelin
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Abstract
Bubbles in asset markets have been documented in numerous experimental studies. However, all experiments in which bubbles occur pay dividends after each trading day. In this paper we study whether bubbles can occur in markets without dividends. We investigate the role of two features that are present in real markets. (1) The mere possibility that some traders may have inside information, and (2) the option to communicate with other traders. We find that bubbles can indeed occur without dividends. Surprisingly, communication turns out to be counterproductive for bubble formation, whereas the possibility of inside information is, as expected, crucial.
| Dokumententyp: | Arbeitspapier |
|---|---|
| Erstellungsdatum: | 12 Mai 2009 13:01 |
| Erscheinungsjahr: | 2007 |
| Institute/Einrichtungen: | Fakultät für Wirtschafts- und Sozialwissenschaften > Alfred-Weber Institut |
| DDC-Sachgruppe: | 330 Wirtschaft |
| Freie Schlagwörter: | asset markets , bubbles , experiment , mirages , dividends |
| Schriftenreihe: | Discussion Paper Series / University of Heidelberg, Department of Economics |
