Price bubbles, gender, and expectations in experimental asset markets

This paper reports results of laboratory markets for a risky asset with a “flat” fundamental value that equates expected dividends to the return on a safe asset. Subjects were sorted by gender in an unobtrusive manner, and bubbles in this setting are pervasive and of comparable magnitude for both genders. In contrast, a robustness check done with a declining fundamental value did generate larger bubbles for groups of males. Elicited price forecasts tend to trail share prices as they rise and exceed prices as they fall, a pattern that is tracked by a “double adaptive” forecasting model.