Do traders learn to select efficient market institutions?

• Original Paper
• Open Access
• Published: 16 April 2021

• Carlos Alós-Ferrer,
• Johannes Buckenmaier &
• Georg Kirchsteiger

Experimental Economics volume 25, pages203–228 (2022)Cite this article

• 569 Accesses

• 2 Citations

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Abstract

When alternative market institutions are available, traders have to decide both where and how much to trade. We conducted an experiment where traders decided first whether to trade in an (efficient) double-auction institution or in a posted-offers one (favoring sellers), and second how much to trade. When sellers face decreasing returns to scale (increasing production costs), fast coordination on the double-auction occurs, with the posted-offers institution becoming inactive. In contrast, under constant returns to scale, both institutions remain active and coordination is slower. The reason is that sellers trade off higher efficiency in a market with dwindling profits for biased-up profits in a market with vanishing customers. Hence, efficiency alone might not be sufficient to guarantee coordination on a single market institution if the surplus distribution is asymmetric. Trading behavior approaches equilibrium predictions (market clearing) within each institution, but switching behavior across institutions is explained by simple rules of thumb, with buyers chasing low prices and sellers considering both prices and trader ratios.

Risk Aversion and Incentive Effects: New Data without Order Effects

Holt, Charles A., and Susan K. Laury. “Risk aversion and incentive effects: New data without order effects." American Economic Review 95.3 (2005): 902-912.  source: PDF [本站]

這篇是 Holt 回應 Harrison et al. (2004) 對先前發表(Holt and Laury, 2002, AER)，有無 order effects 的質礙。

==主要結論是：==

payment 愈高，risk averse 愈明顯，但沒有 order effects。

==notes by yinung==

• 用這來判斷 risk averse: The average number of safe choices(查細設定?)
• 此新實驗改用 a single lotterychoice menu?
• 1st treatment(odered choices): low-pay -> high-payment (20X)
• 另外4個 (unordered) TM
  L(1x)
  L/H0
  H(20x)
  H/H0
• 用兩個無母數檢定

==Game online==

http://veconlab.econ.virginia.edu/lc/lc.php

==references==

• Harrison, G. W., Johnson, E., McInnes, M. M., & Rutström, E. E. (2005). Risk aversion and incentive effects: Comment. American Economic Review, 95(3), 897-901.
• HOLT, Charles A.; LAURY, Susan K. Risk aversion and incentive effects. American economic review, 2002, 92.5: 1644-1655.

GIMS, an open source market software

S. Palan, GIMS-Software for asset market experiments. J. Behav. Exp. Finance 5, 1–14, (2015). Medline doi:10.1016/j.jbef.2015.02.001 (可免費閱讀)

==by YNY==

GIMS 是架在 z-Tree 上，專門用來跑財務資產市場 (又稱 double auction asset market) 的實驗平台軟體，採開放源碼 (open source) 授權。

此文亦介紹、比較了其它相關的財務市場實驗平台軟體，參見文中的 Table 1。

• EconPort MarketLink(based on Java and experiments can be run over the internet)
• Flex-E-Markets(not open source)
• GIMS(based on z-Tree)
• jMarkets (open-source software based on Java)
• Rotman Interactive Trader (非免費)
• SoPHIE Labs (非免費)

Financial Contagion in the Laboratory: Does Network Structure Matter?

Date:	2016-06
By:	John Duffy (Department of Economics, University of California-Irvine) Aikaterini Karadimitropoulou (School of Economics, University of East Anglia) Melanie Parravano (Business School, Newcastle University)
URL:	http://d.repec.org/n?u=RePEc:irv:wpaper:151608&r=net
	We design and report on laboratory experiments exploring the role of interbank network structure for the likelihood of a financial contagion. The laboratory provides us with the control necessary to precisely explore the role of different network configurations for the fragility of the financial system. Specifically, we study the likelihood of financial contagion in complete and incomplete networks of banks who are linked in terms of interbank deposits as in the model of Allen and Gale (2000). Subjects play the role of depositors who must decide whether or not to withdraw their funds from their bank. We find that financial contagions are possible under both network structures. While such contagions always occur under an incomplete interbank network structure, they are significantly less likely to occur under a complete interbank network structure where interbank linkages can effectively provide insurance against shocks to the system, and localize damage from the financial shock.
Keywords:	Contagion; Networks; Experiments; Bank runs,; Interbank seposits; Financial fragility
JEL:	C92 E44 G21

Risk taking and information aggregation in groups

Risk taking and information aggregation in groups

==notes by yinung==

終於有人做類似我之前的實驗想法…

reverse confirmation bias:

* 決策者對於來自於其他人的且和自己所獲看法相同之私有訊息, 所放的權重較少; 反之, 對和自己所獲看法「衝突」之私有訊息, 所放的權重較多。

they place less weight on information from others that agrees with their private signal and more weight on conflicting information.

* 在 group 分享訊息但不溝通的決策情境中, 此現象會減少…

Date:	2015
By:	Spiro Bougheas Jeroen Nieboer Martin Sefton
URL:	http://d.repec.org/n?u=RePEc:ehl:lserod:64085&r=net
	We report a controlled laboratory experiment examining risk-taking and information aggregation in groups facing a common risk. The experiment allows us to examine how subjects respond to new information, in the form of both privately observed signals and signals reported from others. We find that a considerable number of subjects exhibit ‘reverse confirmation bias’: they place less weight on information from others that agrees with their private signal and more weight on conflicting information. We also find a striking degree of consensus when subjects make decisions on behalf of the group under a random dictatorship procedure. Reverse confirmation bias and the incidence of consensus are considerably reduced when group members can share signals but not communicate.
Keywords:	Group behaviour; teams; decision making; risk; experiment
JEL:	C91 C92 D71 D80

“Read my Lips!" Experimental Evidence on the Effects of Electoral Competition on Shirking and Trust

“Read my Lips!" Experimental Evidence on the Effects of Electoral Competition on Shirking and Trust

Date:	2014-11-30
By:	Gari Walkowitz (University of Cologne) Arne R. Weiss (University of Cologne)
URL:	http://d.repec.org/n?u=RePEc:cgr:cgsser:05-07&r=net
	We experimentally test whether electoral competition reduces shirking behavior by office-holders and increases citizens’ trust. We hypothesize that competition increases campaign promises by office-holders, who feel committed to what they promise. Using a novel repeated multi-person investment-game with periodic elections, we indeed find that elected office-holders shirk less (i.e., they back-transfer more to citizens relative to investments) as compared to randomly appointed office-holders. Surprisingly, this effect cannot be explained through competition inflating the level of electoral promises. Nevertheless, promises do matter; in fact, they carry greater weight for the behavior of elected office-holders than for their randomly appointed counterparts. Elections also have a positive short-term effect on citizens’ trust by cutting off both low and excessively high promises.
Keywords:	elections, promises, shirking, trust game
JEL:	D72 D02 D03 C71 C91

Myopic Loss Aversion under Ambiguity and Gender Effects

Myopic Loss Aversion under Ambiguity and Gender Effects

Date:	2013-07
By:	Iñigo Iturbe-Ormaetxe Kortajarene (Universidad de Alicante) Giovanni Ponti (Universidad de Alicante) Josefa Tomás (Universidad de Alicante)
URL:	http://d.repec.org/n?u=RePEc:ivi:wpasad:2013-05&r=net
	Experimental evidence suggests that the frequency with which individuals get feedback information on their investments has an effect on risk-taking behavior. In particular, when they are given information sufficiently often, they take fewer risks compared with a situation in which they are informed less frequently. In this paper we find that this result still holds when subjects do not know the probabilities of the lotteries they are betting upon. We also detect significant gender effects, in that the frequency with which information is disclosed mostly affects men’s betting behavior, rather than women’s, and that men are much more risk-seeking after experiencing a loss.
Keywords:	Myopic loss aversion, evaluation periods, ambiguity, gender effects
JEL:	C91

Myopic loss aversion: Information feedback vs. investment flexibility

Charles Bellemare, Michaela Krausee, Sabine Krfgerf,Chendi Zhang (2005) “Myopic loss aversion: Information feedback vs. investment flexibility“. Economics Letters, vol., 87, pp.319 – 324. *****

==notes by yinung==

主要結論：

只要資訊頻率降低, 即可讓投資風險資產意願提高.

主要實驗設計:

在於資訊迴饋頻率 frequent/infrequent, 其 treatment 有三種:

H: 投資期間1期, 資訊迴饋頻率每1期
M: 投資期間3期, 資訊迴饋頻率每1期
L: 投資期間3期, 資訊迴饋頻率每3期

Bellemare et al. (2005) 實驗結果是: 投資額度 L~M>H

Results

• We confirm the works by Gneezy and Potters (1997) and others building on it, and furthermore find that experimentally induced myopia in combination with loss aversion remained to affect investment behavior systematically even when flexibility in adjusting investment was no longer varied. MLA is driven by information feedback.

Abstract

We experimentally disentangle the effect of information feedback from the effect of investment flexibility on the investment behavior of a myopically loss averse investor. Our findings show that varying the information condition alone suffices to induce behavior that is in line with the hypothesis of Myopic Loss Aversion.

Causes, Consequences, and Cures of Myopic Loss Aversion – An Experimental Investigation*

Fellner, G., & Sutter, M. (2009). Causes, Consequences, and Cures of Myopic Loss Aversion–An Experimental Investigation*. The Economic Journal, 119(537), 900-916. (Volume 119, Issue 537, ) DOI: 10.1111/j.1468-0297.2009.02251.x; uibk.ac.at 提供的2008年版 [PDF]; hu-berlin.de 提供的 2005年版[PDF]; ***

==notes by yinung==

這篇有讓 subject 內生決定 H1 或 H3
(投資1期/3期)

==主要實驗結果圖表==

實驗基本設定

符號意義:

H1/3: investment 1/3 period
F1: Feedback, 1 period

 

 

第1期決定以後不能更能 H1/3

No-profit: 沒有給 profit 資訊
Profit:有給「告訴 subject, 選 3期, 其平均 profit 較高 」資訊

內生決定 feedback: F1/3, 但每期都可投資

Profit: 和前述相同

第1期被指定 H1/3; 第3期開始可以自訂(每3期一次), 轉換成本 40ECU (約報酬的 2.6%)

==original abstract==

We use an experiment to examine the causes, consequences and possible cures of myopic loss aversion (MLA) for investment behaviour under risk. We find that both investment horizons and feedback frequency contribute almost equally to the effects of MLA. Longer investment horizons and less frequent feedback lead to higher investments. However, when given the choice, subjects prefer on average shorter investment horizons and more frequent feedback. Exploiting the status quo bias by setting a long investment horizon or low feedback frequency as a default turns out to be a successful behavioural intervention to increase investment levels.

No myopic loss aversion in adolescents? – An experimental note

No myopic loss aversion in adolescents (青少年)? – An experimental note

Date:	2013-03
By:	Daniela Glätzle-Rützler Matthias Sutter Achim Zeileis
URL:	http://d.repec.org/n?u=RePEc:inn:wpaper:2013-07&r=net
	Myopic loss aversion (MLA) has been found to play a persistent role for investment behavior under risk. We study whether MLA is already present during adolescence. Quite surprisingly, we find no evidence of MLA in a sample of 755 adolescents. This finding is at odds with previous findings, and it might be explained by self-selection effects. In other dimensions, however, we are able to replicate stylized findings in our pool of adolescents, such that teams invest higher amounts than individuals and that women invest less than men.
Keywords:	myopic loss aversion, experiment, adolescents, team-decision making
JEL:	C91