Unleashing animal spirits - Self-control and overpricing in experimental asset markets

Kocher, Martin G.ORCID: https://orcid.org/0000-0002-6792-1192; Lucks, Konstantin E. and Schindler, David (2019) Unleashing animal spirits - Self-control and overpricing in experimental asset markets. Review of Financial Studies, 32 (6), pp. 2149-2178. https://doi.org/10.1093/rfs%2Fhhy109

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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 self-control traders report stronger emotions after the market.

Item Type: Article in Academic Journal
Additional Information (public): ebenso: CESifo Working Paper Series No. 5812
Classification Codes (e.g. JEL): G12, G11, D84, D53, G02
Research Units: Former Research Units (until 2020) > Insight Austria
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Date Deposited: 25 Sep 2018 08:57
Last Modified: 04 Jun 2019 09:43
DOI: 10.1093/rfs/hhy109
ISSN: 0893-9454, 1465-7368
URI: https://irihs.ihs.ac.at/id/eprint/4751

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