Does the ability to ‘read the market’ affect equilibrium formation in asset markets? To answer this question, we conducted pre-registered learning to forecast experiments with market groups composed of either subjects with high or low Theory of Mind (ToM) capabilities, elicited via the eye...

Recent studies suggest that the type of strategic environment or expectation feedback may have a large impact on whether the market learns the rational fundamental price. We present an experiment where the fundamental price experiences large unexpected shocks. Markets with negative expectation...

This experiment compares the price dynamics and bubble formation in an asset market with a price adjustment rule in three treatments where subjects (1) submit a price forecast only, (2) choose quantity to buy/sell and (3) perform both tasks. We find deviation of the market price from the...