Title: Comparing Laboratory Experiments and Agent-Based Simulations: The Value of Information and Market Efficiency in a Market with Asymmetric Information
Abstract: In this paper agent-based simulations are employed to deepen our understanding of results from experimental asset markets with asymmetric fundamental information. Beside the experimental treatment, we implement two simulation settings: a base-case simulation with all agents using their fundamental information and an equilibrium solution in which agents can choose from a set of three different strategies. We find that the behavior of the human subjects closely matches a strategy based on using the fundamental information provided, even when other strategies would have resulted in higher earnings. As a consequence, efficiency in the human markets is lower than in most of the simulated markets.
Publication Year: 2009
Publication Date: 2009-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
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Cited By Count: 3
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