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Publication Detailed Description
Information aggregation in experimental asset markets in the presence of a manipulator
Journal Title
Experimental Economics
Year (definitive publication)
2010
Language
English
Country
Netherlands
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Abstract
We study with the help of a laboratory experiment the conditions under which an uninformed manipulator—a robot trader that unconditionally buys several shares of a common value asset in the beginning of a trading period and unwinds this position later on—is able to induce higher asset prices. We find that the average price is significantly higher in the presence of the manipulator if and only if the asset takes the lowest possible value and insiders receive perfect information about the true value of the asset. It is also evidenced that the robot trader makes trading gains. Finally, both uninformed and partially informed traders may suffer from the presence of the robot.
Acknowledgements
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Keywords
Asset market,Experiment,Price manipulation,Rational expectations
Fields of Science and Technology Classification
- Economics and Business - Social Sciences
Funding Records
| Funding Reference | Funding Entity |
|---|---|
| MTM2009-13985-C02-01 | Ministerio de Economía, Industria y Competitividad |
| ECO2009-08900 | Ministerio de Economía, Industria y Competitividad |
| ECO2009–07530 | Ministerio de Economía, Industria y Competitividad |
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