How do markets react to (un)expected fundamental value shocks? An experimental analysis.

13 May 2019

By CEE-M

We perform a market experiment to investigate how prices react to the new information. Specifically, westudy experimentally the impact of expected/unexpected fundamental value shocks in an asset market. Subjects were involved in two consecutive experimental markets, market 1 and market 2, with a constant fundamental value as in Noussairet al.(2001).Market 2is similar to the one studied by Weber and Welfens (2007) in which the fundamental value is stochastic.