How initial price history influences expectation formation in multi-asset experimental markets: An exploratory case study
We present an exploratory study on expectation formation in a controlled experimental setting. Participants predicted the prices of three risky assets, with their key information being the initial price history. Our research investigates the impact of the initial price history on overall price dynam...
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| Format: | Article |
| Language: | English |
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2025-06-01
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| Series: | Economics and Business Review |
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| Online Access: | https://doi.org/10.18559/ebr.2025.2.1751 |
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| author | Kresta Aleš Sedláková Michaela |
| author_facet | Kresta Aleš Sedláková Michaela |
| author_sort | Kresta Aleš |
| collection | DOAJ |
| description | We present an exploratory study on expectation formation in a controlled experimental setting. Participants predicted the prices of three risky assets, with their key information being the initial price history. Our research investigates the impact of the initial price history on overall price dynamics and the participants’ coordination. We provide tentative evidence highlighting several key points. Firstly, a stable initial price history reduces asset price volatility. Secondly, the correlation between assets during the initial price history is crucial for price dynamics. Notably, two assets exhibited strong negative dependence, which significantly influenced participants’ expectations. It is important to note that this dependence persisted in subsequent price evolution. In general, the initial price history played a pivotal role in shaping participants’ expectations. Given the exploratory nature of this study, we acknowledge that these findings are preliminary and should be interpreted with caution. We also point to ways for future research to validate our initial findings. |
| format | Article |
| id | doaj-art-ce9b8b35cdcc403e8188d16151d2fccf |
| institution | Kabale University |
| issn | 2450-0097 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | Sciendo |
| record_format | Article |
| series | Economics and Business Review |
| spelling | doaj-art-ce9b8b35cdcc403e8188d16151d2fccf2025-08-20T03:27:21ZengSciendoEconomics and Business Review2450-00972025-06-0111273710.18559/ebr.2025.2.1751How initial price history influences expectation formation in multi-asset experimental markets: An exploratory case studyKresta Aleš0Sedláková Michaela1Department of Finance, VSB – Technical University of Ostrava, 17. listopadu 2172/15, 708 00 Ostrava – Poruba, Czech RepublicDepartment of Finance, VSB – Technical University of Ostrava, 17. listopadu 2172/15, 708 00 Ostrava – Poruba, Czech RepublicWe present an exploratory study on expectation formation in a controlled experimental setting. Participants predicted the prices of three risky assets, with their key information being the initial price history. Our research investigates the impact of the initial price history on overall price dynamics and the participants’ coordination. We provide tentative evidence highlighting several key points. Firstly, a stable initial price history reduces asset price volatility. Secondly, the correlation between assets during the initial price history is crucial for price dynamics. Notably, two assets exhibited strong negative dependence, which significantly influenced participants’ expectations. It is important to note that this dependence persisted in subsequent price evolution. In general, the initial price history played a pivotal role in shaping participants’ expectations. Given the exploratory nature of this study, we acknowledge that these findings are preliminary and should be interpreted with caution. We also point to ways for future research to validate our initial findings.https://doi.org/10.18559/ebr.2025.2.1751experimental economicsexpectationsasset pricingc92d84g12g41 |
| spellingShingle | Kresta Aleš Sedláková Michaela How initial price history influences expectation formation in multi-asset experimental markets: An exploratory case study Economics and Business Review experimental economics expectations asset pricing c92 d84 g12 g41 |
| title | How initial price history influences expectation formation in multi-asset experimental markets: An exploratory case study |
| title_full | How initial price history influences expectation formation in multi-asset experimental markets: An exploratory case study |
| title_fullStr | How initial price history influences expectation formation in multi-asset experimental markets: An exploratory case study |
| title_full_unstemmed | How initial price history influences expectation formation in multi-asset experimental markets: An exploratory case study |
| title_short | How initial price history influences expectation formation in multi-asset experimental markets: An exploratory case study |
| title_sort | how initial price history influences expectation formation in multi asset experimental markets an exploratory case study |
| topic | experimental economics expectations asset pricing c92 d84 g12 g41 |
| url | https://doi.org/10.18559/ebr.2025.2.1751 |
| work_keys_str_mv | AT krestaales howinitialpricehistoryinfluencesexpectationformationinmultiassetexperimentalmarketsanexploratorycasestudy AT sedlakovamichaela howinitialpricehistoryinfluencesexpectationformationinmultiassetexperimentalmarketsanexploratorycasestudy |