Tournament incentives’ schemes have been criticized for inducing excessive risk-taking among financial market participants. In this paper we investigate how relative performance-based incentive schemes and status concerns for higher rank influence portfolio choice in laboratory experiments. We...

One potential reason for bubbles evolving prior to the financial crisis was excessive risk taking stemming from option-like incentive schemes in financial institutions. By running laboratory asset markets, we investigate the impact of option-like incentives on price formation and trading...

For the past two decades a market model introduced by Smith, Suchanek, and Williams (1988, henceforth SSW) has dominated experimental research on financial markets. In SSW the fundamental value of the traded asset is determined by the expected value of a finite stream of dividend payments. This...

Corporate sports sponsorship is an important part of many companies? corporate communication strategy. We take the example of major football tournaments to show that sponsorship indeed affects the sponsor?s (stock) market value. We find a statistically significant impact of football results (at...

In contrast to existing literature we implement experimental asset markets with fluctuating fundamental values following a stochastic process. Therefore we can measure traders' behavior in both bullish and bearish markets. We observe underreaction of price changes to changes in fundamental value...

We present results from experimental asset markets and simulations in which traders are asymmetrically informed about the fundamental value of an asset. To control for learning we run the experimental markets three times with identical subjects at identical information levels. With...

Corporate sports sponsorship is an important part of many companies’ corporate communication strategy. In this paper, we take the example of major football tournaments to show that sponsorship indeed affects the sponsor's (stock) market value. We find a statistically significant impact of...

Received wisdom holds that income rank matters for life satisfaction. In much of the literature, however, income comparisons are limited to the national population and evidence is correlational. In this paper, we investigate differences in the causal effects of rank information across reference...