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Speculative Bubbles - An introduction and application of the Speculation Elicitation Task (SET)

Author

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  • Janssen, Dirk-Jan
  • Weitzel, Utz
  • Füllbrunn, Sascha

Abstract

We introduce the speculation elicitation task (SET) to measure speculative tendencies of individuals. The resulting SET-score allows us to investigate the role of individual speculative behavior on experimental asset market bubbles. The experimental results show that overpricing in asset markets composed of subjects with a high propensity to speculate (high SET-score) is significantly higher than in markets composed of subjects with a low propensity to speculate (low SET-score). We conclude that speculative tendencies are an important driver of price bubbles in experimental asset markets.

Suggested Citation

  • Janssen, Dirk-Jan & Weitzel, Utz & Füllbrunn, Sascha, 2015. "Speculative Bubbles - An introduction and application of the Speculation Elicitation Task (SET)," MPRA Paper 63028, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:63028
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    More about this item

    Keywords

    Speculation; Experimental Asset Markets; Finance;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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