Behavioural Effects and Market Dynamics in Field and Laboratory Experimental Asset Markets
1
Chair of Cognitive Science, Department of Humanities, Social and Political Sciences (D-GESS), ETH Zurich, 8092 Zurich, Switzerland
2
Institute of Risk Analysis, Prediction and Management (Risks-X), Academy for Advanced Interdiscplinary Studies, Southern University of Science and Technology (SUSTech), Shenzhen 518055, China
3
Chair of Entrepreneurial Risks, Department of Management, Technology and Economics (D-MTEC), ETH Zurich, 8092 Zurich, Switzerland
4
Swiss Finance Institute, c/o University of Geneva, 1211 Geneva, Switzerland
*
Authors to whom correspondence should be addressed.
Entropy 2020, 22(10), 1183; https://doi.org/10.3390/e22101183
Received: 13 August 2020
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Revised: 27 September 2020
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Accepted: 10 October 2020
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Published: 20 October 2020
(This article belongs to the Special Issue Information Theory at the Crossroads of Artificial Intelligence, Human Cognition, and Economics)
A vast literature investigating behavioural underpinnings of financial bubbles and crashes relies on laboratory experiments. However, it is not yet clear how findings generated in a highly artificial environment relate to the human behaviour in the wild. It is of concern that the laboratory setting may create a confound variable that impacts the experimental results. To explore the similarities and differences between human behaviour in the laboratory environment and in a realistic natural setting, with the same type of participants, we translate a field study conducted by reference (Sornette, D.; et al. Econ. E-J.2020, 14, 1–53) with trading rounds each lasting six full days to a laboratory experiment lasting two hours. The laboratory experiment replicates the key findings from the field study but we observe substantial differences in the market dynamics between the two settings. The replication of the results in the two distinct settings indicates that relaxing some of the laboratory control does not corrupt the main findings, while at the same time it offers several advantages such as the possibility to increase the number of participants interacting with each other at the same time and the number of traded securities. These findings pose important insights for future experiments investigating human behaviour in complex systems.
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Keywords:
experimental asset markets; psychological entropy; replicability; laboratory experiments; field experiments; complex systems
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Description: Studies presented in the submitted paper are a part of a project. The project description, experimental material and data is published on the Open Science Framework.
MDPI and ACS Style
Andraszewicz, S.; Wu, K.; Sornette, D. Behavioural Effects and Market Dynamics in Field and Laboratory Experimental Asset Markets. Entropy 2020, 22, 1183. https://doi.org/10.3390/e22101183
AMA Style
Andraszewicz S, Wu K, Sornette D. Behavioural Effects and Market Dynamics in Field and Laboratory Experimental Asset Markets. Entropy. 2020; 22(10):1183. https://doi.org/10.3390/e22101183
Chicago/Turabian StyleAndraszewicz, Sandra, Ke Wu, and Didier Sornette. 2020. "Behavioural Effects and Market Dynamics in Field and Laboratory Experimental Asset Markets" Entropy 22, no. 10: 1183. https://doi.org/10.3390/e22101183
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