Experimental Economics Seminar for September 12

Events, Seminars | August 23, 2014

Join us for the first ICES Experimental Economics Seminar of the semester, featuring Anya Samek.

Professor Samek, of the University of Wisconsin-Madison, will discuss her paper (co-authored with Tim Cason) Visual Representation and Observational Learning in Asset Market Bubbles (abstract). The talk will take place on Friday, September 12, from 4:00 to 5:30pm, in room 5183 of the Metropolitan Building, Arlington campus.

Visit the Seminar schedule to access the paper and to learn more about upcoming speakers.


We report a laboratory experiment that investigates the impact of observational learning and visual information display on bubble formation in asset markets with inexperienced and experienced traders. We first vary whether the continuously-updated transaction prices are displayed in a column of text or in a graphical display (with time on the X-axis and price on the Y-axis). Second, to explore observational learning we employ pre-market training in which each participant is ‘matched’ with a trader from a different prior market and observes all trading details but does not participate in trading directly. We find that among inexperienced and once-experienced traders, markets with the tabular display result in bubbles that are greater in amplitude relative to markets with the graphical display. Policy-makers have to date focused on the content of information conveyed to consumers, but have paid limited attention to the format. Our findings highlight the importance of considering format in practice. In addition, we find that observational learning, similar to experience, significantly reduces the amplitude of bubbles in subsequent markets. The latter finding suggests that observation of prices is a key mechanism through which experience mitigates bubbles.

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