Unleashing animal spirits: Self-control and overpricing in experimental asset markets

Martin G Kocher, Konstantin E Lucks, David Schindler

Research output: Contribution to journalArticleScientificpeer-review

28 Citations (Scopus)


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 languageEnglish
Pages (from-to)2149-2178
JournalReview of Financial Studies
Issue number6
Early online dateSept 2018
Publication statusPublished - Jun 2019


  • asset pricing
  • trading volume
  • bond interest rates
  • portfolio choice
  • investments decisions
  • expectations
  • speculations
  • financial markets
  • behavioral finance
  • underlying principles


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