Experimental Economics

, Volume 18, Issue 2, pp 314–334 | Cite as

Multi-period experimental asset markets with distinct fundamental value regimes

  • Thomas Stöckl
  • Jürgen Huber
  • Michael Kirchler
Original Paper


In this methodological study we analyze price adjustment processes in multi-period laboratory asset markets with five distinct fundamental value \((\hbox {FV})\) regimes in a unified framework. Minimizing the effect of between-treatment variations we run markets with deterministically decreasing, constant, randomly fluctuating and—as main innovation—markets with deterministically increasing \(\hbox {FV}\)s. We find (i) efficient pricing in markets with constant \(\hbox {FV}\)s, (ii) overvaluation in markets with decreasing \(\hbox {FV}\)s, and (iii) undervaluation in markets with increasing \(\hbox {FV}\)s. (iv) Markets with randomly fluctuating fundamentals show overvaluation when \(\hbox {FV}\)s predominantly decline and undervaluation when \(\hbox {FV}\)s are mostly upward-sloping. Finally, we document that (v) bid-ask spreads and volatility of price changes are positively correlated with mispricing across regimes. The main contribution of the paper is to provide clean comparisons between distinct \(\hbox {FV}\) regimes, in particular between markets with increasing \(\hbox {FV}\)s and other regimes.


Experimental finance Asset market Bubble Market efficiency Fundamental value 

JEL Classification

C92 D84 G10 



We thank participants of SAET 2011 and Experimental Finance 2011 for helpful comments. Financial support by the Austrian National Bank (OeNB-Grants 12789 and 14953), the Austrian Science Foundation (FWF-Grant 20609 and FWF-Grant 22400, START-Grant Y617-G11), and the University of Innsbruck (Nachwuchsförderung Stöckl) is gratefully acknowledged.

Supplementary material

10683_2014_9404_MOESM1_ESM.pdf (359 kb)
(PDF 359 kb)


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Copyright information

© Economic Science Association 2014

Authors and Affiliations

  • Thomas Stöckl
    • 1
  • Jürgen Huber
    • 1
  • Michael Kirchler
    • 1
    • 2
  1. 1.Department of Banking and FinanceInnsbruck University School of ManagementInnsbruckAustria
  2. 2.Department of Economics, Centre for FinanceUniversity of GothenburgGöteborgSweden

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