Abstract
Small-scale financial markets have been studied in the laboratory for more than two decades. Typically, 6–20 human subjects buy and sell units of a single asset whose dividends extend over several periods and/or are uncertain. Such markets permit direct observation of informational efficiency, and allow sharp tests of theoretical predictions. They also provide test beds for policy initiatives, new market formats and automated trading strategies.
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Friedman, D. (2018). Laboratory Financial Markets. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2766
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DOI: https://doi.org/10.1057/978-1-349-95189-5_2766
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