Bubbles in asset markets and the heterogeneity of beliefs

Eizo Akiyama; Yukihiko Funaki; Ryuichiro Ishikawa; Yaron Lahav; Charles N. Noussair

doi:10.1016/j.jebo.2025.107117

Bubbles in asset markets and the heterogeneity of beliefs

Eizo Akiyama
, Yukihiko Funaki
, Ryuichiro Ishikawa
, Yaron Lahav
, Charles N. Noussair

Research output: Contribution to journal › Article › peer-review

Abstract

We examine the relationship between belief heterogeneity and transaction volume in asset markets. In a laboratory experiment, we elicit long-term beliefs from traders about future prices and make different subsets of the belief information common knowledge, depending on the treatment. There is a strong tendency for traders to adjust their beliefs toward the median belief in their market. There is no effect of making belief information public on transaction volume.

Original language	English (US)
Article number	107117
Journal	Journal of Economic Behavior and Organization
Volume	236
DOIs	https://doi.org/10.1016/j.jebo.2025.107117
State	Published - Aug 2025
Externally published	Yes

Keywords

Beliefs
Experiment
Mispricing
Public information

ASJC Scopus subject areas

Economics and Econometrics
Organizational Behavior and Human Resource Management

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10.1016/j.jebo.2025.107117

Cite this

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title = "Bubbles in asset markets and the heterogeneity of beliefs",

abstract = "We examine the relationship between belief heterogeneity and transaction volume in asset markets. In a laboratory experiment, we elicit long-term beliefs from traders about future prices and make different subsets of the belief information common knowledge, depending on the treatment. There is a strong tendency for traders to adjust their beliefs toward the median belief in their market. There is no effect of making belief information public on transaction volume.",

keywords = "Beliefs, Experiment, Mispricing, Public information",

author = "Eizo Akiyama and Yukihiko Funaki and Ryuichiro Ishikawa and Yaron Lahav and Noussair, \{Charles N.\}",

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language = "English (US)",

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AU - Akiyama, Eizo

AU - Funaki, Yukihiko

AU - Ishikawa, Ryuichiro

AU - Lahav, Yaron

AU - Noussair, Charles N.

PY - 2025/8

Y1 - 2025/8

N2 - We examine the relationship between belief heterogeneity and transaction volume in asset markets. In a laboratory experiment, we elicit long-term beliefs from traders about future prices and make different subsets of the belief information common knowledge, depending on the treatment. There is a strong tendency for traders to adjust their beliefs toward the median belief in their market. There is no effect of making belief information public on transaction volume.

AB - We examine the relationship between belief heterogeneity and transaction volume in asset markets. In a laboratory experiment, we elicit long-term beliefs from traders about future prices and make different subsets of the belief information common knowledge, depending on the treatment. There is a strong tendency for traders to adjust their beliefs toward the median belief in their market. There is no effect of making belief information public on transaction volume.

KW - Beliefs

KW - Experiment

KW - Mispricing

KW - Public information

UR - https://www.scopus.com/pages/publications/105009459185

UR - https://www.scopus.com/pages/publications/105009459185#tab=citedBy

U2 - 10.1016/j.jebo.2025.107117

DO - 10.1016/j.jebo.2025.107117

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VL - 236

JO - Journal of Economic Behavior and Organization

JF - Journal of Economic Behavior and Organization

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ER -

Bubbles in asset markets and the heterogeneity of beliefs

Abstract

Keywords

ASJC Scopus subject areas

Access to Document

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