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Full-Text Articles in Finance and Financial Management
Asset Prices And Information Traders’ Abilities: Evidence From Experimental Asset Markets, Lucy F. Ackert, Bryan K. Church, Ping Zhang
Asset Prices And Information Traders’ Abilities: Evidence From Experimental Asset Markets, Lucy F. Ackert, Bryan K. Church, Ping Zhang
Faculty Articles
This study reports the results of fifteen experimental asset markets designed to investigate the effects of forecasts on market prices, traders’ abilities to assess asset value, and the link between the two. Across the fifteen markets, the authors investigate alternative forecast-generating processes. In some markets the process produces an unbiased estimate of asset value and in others a biased estimate. The processes generating the biased forecasts, though, are less variable than the process generating the unbiased forecast. The authors find that, in general, periodend asset price reflects private forecasts, regardless of the forecast-generating process. Subsequently, they investigate whether traders’ abilities …