We report on six large-scale financial markets experiments that were designed to test two of the most basic propositions of modern asset pricing theory, namely, that the interaction between risk averse agents in a competitive market leads to equilibration, and that, in equilibrium, risk premia...

Experiments were conducted on an asset with the structure of an option. The asset was structured as though before the opening of each trading day a small group of insiders know whether the value of the underlying security will go up or down but the actual value of the underlying security is...