Abstract
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.
Original language | English |
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Pages (from-to) | 2149-2178 |
Journal | Review of Financial Studies |
Volume | 32 |
Issue number | 6 |
Early online date | Sept 2018 |
DOIs | |
Publication status | Published - Jun 2019 |
Keywords
- asset pricing
- trading volume
- bond interest rates
- portfolio choice
- investments decisions
- expectations
- speculations
- financial markets
- behavioral finance
- underlying principles
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Data from Experiment on Self-Control and Overpricing
Schindler, D. (Creator), Kocher, M. (Creator) & Lucks, K. (Creator), DataverseNL, 27 Sept 2018
DOI: 10.34894/lepsb9, https://dataverse.nl/citation?persistentId=doi:10.34894/LEPSB9
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