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http://hdl.handle.net/2123/8752
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| Title: | League-Table Incentives and Price Bubbles in Experimental Asset Markets |
| Authors: | Cheung, Stephen L. Coleman, Andrew School of Economics |
| Keywords: | league table price bubbles managed funds markets tournament incentives asset market experiments |
| Issue Date: | Nov-2012 |
| Publisher: | School of Economics |
| Series/Report no.: | 2012-13 |
| Abstract: | We study experimental markets in which participants face incentives modeled upon those prevailing in markets for managed funds. Each participant’s portfolio is periodically evaluated at market value and ranked in a league table according to short-term paper returns. Those who rank highly attract a larger share of new fund inflows. In an environment in which prices are typically close to intrinsic value, the effect of incentives is mild. However in an environment in which markets are prone to bubble, mispricing is greatly exacerbated by incentives and even become more pronounced with experience. |
| URI: | http://hdl.handle.net/2123/8752 |
| Department/Unit/Centre: | School of Economics |
| Appears in Collections: | Working Papers - Economics |
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