Unleashing animal spirits: Self-control and overpricing in experimental asset markets
- Author(s)
- Martin Kocher, Konstantin E. Lucks, David Schindler
- Abstract
One explanation for overpricing on asset markets is a lack of traders' self-control. We implement the first experiment to address the causal relationship between self-control and systematic overpricing on financial markets. Our setup detects some of the channels through which low individual self-control could transmit into irrational exuberance in markets. Our data indicate a large direct effect of reduced self-control on market overpricing. Low selfcontrol traders report stronger emotions after the market.
- Organisation(s)
- Department of Economics, Vienna Center for Experimental Economics
- External organisation(s)
- Ludwig-Maximilians-Universität München, Tilburg University
- Journal
- The Review of Financial Studies
- Volume
- 32
- Pages
- 2149-2178
- No. of pages
- 30
- ISSN
- 0893-9454
- DOI
- https://doi.org/10.1093/rfs/hhy109
- Publication date
- 06-2019
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502045 Behavioural economics, 502057 Experimental economics, 502021 Microeconomics
- Keywords
- ASJC Scopus subject areas
- Economics and Econometrics, Accounting, Finance
- Portal url
- https://ucrisportal.univie.ac.at/en/publications/1102cb01-7ef0-4f8a-8c2f-24ac7ced2859