Unleashing animal spirits - Self-control and overpricing in experimental asset markets
One explanation for overpricing on asset markets is a lack of traders’ self-control. We implement the first experiment to address the causal relationship between self-control and systematic overpricing on financial markets. Our setup detects some of the channels through which low individual self-con...| Link(s) zu Dokument(en): | IHS Publikation |
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| Hauptverfasser: | , , |
| Format: | Article in Academic Journal PeerReviewed |
| Sprache: | Englisch |
| Veröffentlicht: |
Oxford University Press
2019
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| Zusammenfassung: | One explanation for overpricing on asset markets is a lack of traders’ self-control. We implement the first experiment to address the causal relationship between self-control and systematic overpricing on financial markets. Our setup detects some of the channels through which low individual self-control could transmit into irrational exuberance in markets. Our data indicate a large direct effect of reduced self-control on market overpricing. Low self-control traders report stronger emotions after the market. |
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