An Experimental Study of Bond Market Pricing
Journal
The Journal of Finance
ISSN
0022-1082
Type
journal article
Date Issued
2018-08-24
Author(s)
Abstract (De)
An important feature of bond markets is the relationship between the initial public offering (IPO) price and the probability that the issuer defaults. On the one hand, the default probability affects the IPO price; on the other hand, the IPO price affects the default probability. It is a priori unclear whether agents can competitively price such assets. Our paper is the first to explore this question. To do so, we use laboratory experiments. We develop two flexible bond market models that are easily implemented in the laboratory. We find that subjects learn to price the bonds well after only a few repetitions.
Language
English
Keywords
experimental finance
asset pricing
bond markets
real effects of financial markets
experimental markets
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Wiley
Volume
73
Number
4
Start page
1857
End page
1892
Pages
36
Contact Email Address
matthias.weber@unisg.ch
Eprints ID
254894
File(s)![Thumbnail Image]()
open.access
Name
WPbonds.pdf
Size
461.06 KB
Format
Adobe PDF
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