scholarly journals Informational Price Cascades and Non-Aggregation of Asymmetric Information in Experimental Asset Markets

2011 ◽  
Author(s):  
Jason Shachat ◽  
Anand Srinivasan
Keyword(s):  
Asymmetric Information ◽  
Asset Markets ◽  
Experimental Asset Markets

Experimental asset markets with endogenous choice of costly asymmetric information

2010 ◽  
Vol 14 (2) ◽  
pp. 223-240 ◽  
Author(s):  
Jürgen Huber ◽  
Martin Angerer ◽  
Michael Kirchler
Keyword(s):  
Asymmetric Information ◽  
Asset Markets ◽  
Experimental Asset Markets

The Effect of Misstatements on Decisions of Financial Statement Users: An Experimental Investigation of Auditor Materiality Thresholds

2002 ◽  
Vol 21 (1) ◽  
pp. 11-27 ◽  
Author(s):  
Brad Tuttle ◽  
Maribeth Coller ◽  
R. David Plumlee
Keyword(s):  
Economic Condition ◽  
Accounting Information ◽  
Critical Factor ◽  
Financial Statement ◽  
Asset Markets ◽  
Market Prices ◽  
Financial Misstatements ◽  
Experimental Asset Markets ◽  
Financial Misstatement ◽  
Materiality Thresholds

Auditors are faced with the dilemma of inferring materiality based, in part, on whether a given level of financial misstatement will affect the decisions of statement users. Misstatements in accounting information that are below the materiality threshold are not expected to change users' assessments of a company's economic condition. While the auditing profession accepts materiality in concept, its application in practice is more controversial. In certain settings, the nature of a misstatement, such as changing a small profit into a loss, may affect an auditor's materiality judgment. However, in many cases the magnitude of the misstatement is a critical factor in judging materiality. We focus solely on the issue of magnitude and examine whether financial misstatements that are at or below commonly applied materiality thresholds result in market prices that differ from those resulting from correctly stated information. We conduct a series of 12 experimental asset markets each consisting of 12 independent three-minute trading periods with six traders in each market. We then compare prices for companies generated by markets that are provided either correctly stated information, information containing misstatements that would typically be considered immaterial, or information containing material misstatements. Results indicate that undisclosed misstatements within materiality thresholds that are consistent with current audit practice do not affect market prices, while misstatements well above these thresholds do.

A Culture of Greed: The Effect of Aggregate Greed on Bubble Formation in Experimental Asset Markets

2021 ◽  
Author(s):  
Karlijn Hoyer ◽  
Stefan Zeisberger ◽  
Marcel Zeelenberg ◽  
Seger Breugelmans
Keyword(s):  
Bubble Formation ◽  
Asset Markets ◽  
Experimental Asset Markets

Blocking Coalitions and Fairness in Asset Markets and Asymmetric Information Economies

2019 ◽  
Vol 20 (1) ◽  
Author(s):  
Anuj Bhowmik ◽  
Maria Gabriella Graziano
Keyword(s):  
Asymmetric Information ◽  
Status Quo ◽  
Veto Power ◽  
Asset Markets ◽  
The Core ◽  
Information Models ◽  
The Status ◽  
Initial Improvement ◽  
Core Allocations ◽  
Asymmetric Information Economies

AbstractThis paper analyses two properties of the core in a two-period exchange economy under uncertainty: the veto power of arbitrary sized coalitions; and coalitional fairness of core allocations. We study these properties in relation to classical (static) and sequential (dynamic) core notions and apply our results to asset markets and asymmetric information models. We develop a formal setting where consumption sets have no lower bound and impose a series of general restrictions on the first period trades of each agent. All our results are applications of the same lemma about improvements to an allocation that is either non-core or non-coalitionally fair. Roughly speaking, the lemma states that if all the members of a coalition achieve a better allocation in some way (for instance, by blocking the status quo allocation or because they envy the net trade of other coalitions) then an alternative improvement can be obtained through a perturbation of the initial improvement.

scholarly journals Do option-like incentives induce overvaluation? Evidence from experimental asset markets

2014 ◽  
Vol 40 ◽  
pp. 179-194 ◽  
Author(s):  
Martin Holmen ◽  
Michael Kirchler ◽  
Daniel Kleinlercher
Keyword(s):  
Asset Markets ◽  
Experimental Asset Markets
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