TY - JOUR
T1 - Futures markets and bubble formation in experimental asset markets
AU - Noussair, Charles
AU - Tucker, Steven
PY - 2006/6
Y1 - 2006/6
N2 - We construct asset markets of the type studied in Smith et al. (1988) in which price bubbles and crashes are widely observed. In addition to a spot market, there are futures markets in operation, one maturing at the beginning of each period of the life of the asset. We find that when futures markets are present, bubbles do not occur in the spot markets. The futures markets seem to reduce the speculation and the decision errors that appear to give rise to price bubbles in experimental asset markets.
AB - We construct asset markets of the type studied in Smith et al. (1988) in which price bubbles and crashes are widely observed. In addition to a spot market, there are futures markets in operation, one maturing at the beginning of each period of the life of the asset. We find that when futures markets are present, bubbles do not occur in the spot markets. The futures markets seem to reduce the speculation and the decision errors that appear to give rise to price bubbles in experimental asset markets.
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U2 - 10.1111/j.1468-0106.2006.00308.x
DO - 10.1111/j.1468-0106.2006.00308.x
M3 - Article
AN - SCOPUS:33744899122
SN - 1361-374X
VL - 11
SP - 167
EP - 184
JO - Pacific Economic Review
JF - Pacific Economic Review
IS - 2
ER -