This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window
Open in New Tab
Open in same window
Journal of Economic Perspectives: Vol. 12 No. 1 (Winter 1998)
JEP Volume. 12, Issue 1 | 
Previous ArticleNext Article
Sign up for Email Alerts Follow us on Twitter
Full-text Article (Complimentary)
View Comments on This Article (0) | Login to post a comment
Previous ArticleNext Article
Expand
Quick Tools:
Print Article Summary Email Link to this Article Export CitationSign up for Email Alerts Follow us on Twitter
Explore:
Classroom Games: Speculation and Bubbles in an Asset Market
Article Citation
Ball, Sheryl B., and
Charles A. Holt. 1998. "Classroom Games: Speculation and Bubbles in an Asset Market."
Journal of Economic Perspectives,
12(1): 207-218.
DOI: 10.1257/jep.12.1.207
DOI: 10.1257/jep.12.1.207
Abstract
This paper describes a classroom exercise in which students trade assets of uncertain value in a sequence of market periods. Assets pay one-dollar dividends at the end of each period, but once the dividend is paid there is fixed probability that the asset will be destroyed. Dividends and probabilities are chosen so that the fundamental value is constant over time. Speculative bubbles can be caused by divergent expectations about other traders' valuations of the asset. This exercise provides an interactive framework that facilitates discussions of discounting, rational expectations, and backward induction.
Article Full-Text Access
Full-text Article (Complimentary)
Authors
Ball, Sheryl B. (VA Polytechnic Institute & State U)
Holt, Charles A. (U VA)
Holt, Charles A. (U VA)
JEL Classifications
A22: Economic Education and Teaching of Economics: Undergraduate
G12: Asset Pricing; Trading volume; Bond Interest Rates
G12: Asset Pricing; Trading volume; Bond Interest Rates
Comments
View Comments on This Article (0) | Login to post a comment
