Abstract

Whether Communication can help reduce asset market mispricing or increase mispricing is still an open question. Previous theoretical and empirical study provide mixed evidence on this topic. By using a typical SSW type experimental asset market, we design 2 experimental treatments (Chat vs No_Chat) to investigate the effect of online communication on experimental asset bubbles. Our experimental result shows that the online communication among traders cannot reduce the asset bubbles and even enlarge the level. However, the statistical test show that the difference of bubbles level between Chat treatment and No_Chat treatment is not significant.

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