A common finding in laboratory studies is that subjects anchor on irrelevant initial cues when valuing assets. We run a field experiment to examine whether this heuristic can be exploited to manipulate prices in real markets. We provide early quotes in a series of horse race betting markets, and...

We conduct a field experiment to see if market liquidity has a causal effect on price efficiency and, if so, why. We randomly provide liquidity in certain horse race betting markets, and not in others. We find that prices in treated markets are indeed more efficient than prices in control...