Certainty and Decision-Making in Experimental Asset Markets

Nicolás Aragón & Rasmus Pank Roulund

The two papers that are the topic of this page we examine how participant and market confidence affects the market outcome in an experiment asset market with a asset with a known fundamental value. We measure confidence by asking participant to forecast the one-period-ahead price as a discrete probability mass distribution. We find that confidence, measured at individual level and aggregated to market sentiments affect the price-formation in markets. In the second paper, we examine an endogenously generated signal generated from participants' forecasts.