Asset Legitimacy in Experimental Asset Markets

Debapriya Jojo Paul*, Julia Henker, Sian Owen

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

1 Citation (Scopus)


We investigate whether prices in experimental asset markets behave differently when participants are required to trade with earned wealth compared to unearned wealth. Unearned endowed wealth, the standard practice in experimental studies of asset price bubbles, may elicit greater than normal risk-seeking behavior. We test for this altered behavior by requiring some participants to earn their initial market allocation. We do not find a significant difference in the frequency, severity, or duration of mispricing between earned and unearned endowments. Our results confirm the validity of the existing methodologies used in the study of bubbles in experimental settings.

Original languageEnglish
Pages (from-to)183-198
Number of pages16
JournalJournal of Behavioral Finance
Issue number2
Publication statusPublished - 3 Apr 2015


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