In this paper, we reexamine a bias revealed by Kunz et al. (2017) regarding structured financial products known as barrier reverse convertibles (BRCs) with worst-of payout characteristics. Namely, using a nonincentivized survey of investor risk perceptions, Kunz et al. (2017) found that when...

In this paper, we extend the individual evolutionary learning model by incorporating other-regarding considerations and apply the model to some Cournot games. Using the model fitted to the experimental data of a repeated 3-player Cournot game (with nonlinear cost and demand functions), we...

In this paper, we reexamine a bias revealed by Kunz et al. (2017) regarding structured financial products known as barrier reverse convertibles (BRCs) with worst-of payout characteristics. Namely, using a nonincentivized survey of investor risk perceptions, Kunz et al. (2017) found that when...

How is one’s cognitive ability related to the way one responds to strategic uncertainty? We address this question by conducting a set of experiments in simple 2 x 2 dominance solvable coordination games. Our experiments involve two main treatments: one in which two human subjects interact, and...

We investigate the extent to which price deviations from fundamental values in an experimental asset market are due to the uncertainty of subjects regarding others’ rationality. We do so by comparing the price forecasts submitted by subjects in two market environments: (a) all six traders are...

This paper develops a simple business-cycle model in which financial shocks have large macroeconomic effects when private agents are gradually learning their uncertain environment. When agents update their beliefs about the parameters that govern the unobserved process driving financial shocks...

To what extent is the observed mis-pricing in experimental asset markets caused by strategic uncertainty (SU) and by individual bounded rationality (IBR)? We address this question by comparing subjects initial price forecasts in two market environments – one with six human traders, and the...

We conducted asset market experiments where one experienced subject interacts with five inexperienced subjects to investigate how experienced subjects change their price forecasts and trading behavior when faced with strategic uncertainty caused by inflows of inexperienced subjects. Only half...