Kogan, Shimon
[Verfasser:in]
;
Kwasnica, Anthony M.
[Sonstige Person, Familie und Körperschaft];
Weber, Roberto A.
[Sonstige Person, Familie und Körperschaft]
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments February 13, 2009 erstellt
Beschreibung:
We explore both theoretically and experimentally how final prices and security holdings in an asset market influence and forecast behavior and outcomes in an affiliated coordination game. We vary the incentives from the market relative to payoffs from the game, the number of players in a group, and whether traders' payoffs are influenced by outcomes in their own or another group. Markets lead to significantly less efficient group outcomes across all treatments, even when the market produces little or no distortion of incentives in the game. At the same time, we find that asset markets are informative about group outcomes and thereby reduce wasted input.' Our experiment may therefore shed light on how financial markets themselves may contribute to economic crises