Experimental Design and Methodology

Due to the number of different experimental market designs and treatments, different articles in the literature sometimes use the same terms to refer to different components of an experiment. As an example, the term of an “experiment” can refer to one run of an experimental market, to the set of runs conducted with the same subjects or treatment design, or to the set of all runs and treatments conducted to answer a research question (depending on the study one chooses from the literature). To ensure that the meaning of the terms used in the description of the design and in the presentation of the results are unambiguous, the following chapters require some conventions with regard to the nomenclature employed. Such a convention is specified in the following paragraphs: In the experimental work conducted for and presented in the following chapters, a periodis the time of continuous trading in the experimental market between two consecutive dividend payments. In the experiments reported below, a period lasted between 240 and 300 s (depending on the experimental treatment, as will be described later in this chapter). After each period, subjects were presented with the period-end screen, which gave them information on stock trading, option trading and the evolution of their portfolio over the period, as well as an outlook on future periods. A period can be thought of as loosely corresponding to a trading day in real-world financial markets.