This paper reports findings from a series of laboratory asset markets. Although stakes in these markets are modest, asset prices display a substantial equity premium (risky assets are priced substantially below their expected payoffs) – indicating substantial risk aversion. Moreover, the...

This paper reports on experimental tests of an instantiation of the Lucas asset pricing model with heterogeneous agents and time-varying private income streams. Central features of the model (infinite horizon, perishability of consumption, stationarity) present difficult challenges and require a...

Biographical note: BossaertsPeter: Peter Bossaerts is William D. Hacker Professor of Economics and Management, Professor of Finance, and Executive Officer for the Social Sciences at the California Institute of Technology. He is the coauthor of "Lectures on Corporate Finance".