eprintid: 3258 rev_number: 8 eprint_status: archive userid: 1482 importid: 105 dir: disk0/00/00/32/58 datestamp: 2012-01-18 06:00:49 lastmod: 2021-04-02 15:36:13 status_changed: 2012-01-18 06:00:49 type: monograph metadata_visibility: no_search creators_name: Moinas, Sophie creators_name: Pouget, Sébastien creators_idrefppn: 078527112 creators_idrefppn: 151861285 title: Rational and Irrational Bubbles: an Experiment ispublished: pub subjects: subjects_ECO abstract: This paper proposes a theory of rational bubbles in an economy with finite trading opportunities. Bubbles arise because agents are never sure to be last in the market sequence. This theory is used to design an experimental setting in which bubbles can be made rational or irrational by varying one parameter. This complements the experimental literature on irrational bubbles initiated by Smith, Suchanek and Williams (1988). Our experimental results suggest that it is pretty difficult to coordinate on rational bubbles even in an environment where irrational bubbles flourish. Maximum likelihood estimations show that these results can be reconciled within the context of Camerer, Ho, and Chong (2004)'s cognitive hierarchy model, and Mc Kelvey and Palfrey (1995)'s quantal response equilibrium. date: 2009-05 date_type: published publisher: TSE Working Paper official_url: http://tse-fr.eu/pub/21929 faculty: tse divisions: tse language: en has_fulltext: TRUE view_date_year: 2009 full_text_status: public monograph_type: working_paper series: TSE Working Paper volume: 09-045 book_title: TSE Working Paper oai_identifier: oai:tse-fr.eu:21929 harvester_local_overwrite: faculty harvester_local_overwrite: site harvester_local_overwrite: creators_idrefppn oai_lastmod: 2015-07-31T18:00:02Z oai_set: tse site: ut1 citation: Moinas, Sophie and Pouget, Sébastien (2009) Rational and Irrational Bubbles: an Experiment. TSE Working Paper, n. 09-045 document_url: https://publications.ut-capitole.fr/id/eprint/3258/1/wp_fit_45_2009.pdf