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Anxiety and Learning in Dynamic and Static Clock Game Experiments

Kang, Min Jeong and Ray, Debajyoti and Camerer, Colin F. (2010) Anxiety and Learning in Dynamic and Static Clock Game Experiments. Social Science Working Paper, California Institute of Technology , Pasadena, CA. (Unpublished)

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In clock games, agents receive differently-timed private signals when an asset value is above its fundamental. The price crashes to the fundamental when K of N agents have decided to sell. If selling decisions are private, bubbles can be sustained because people delay selling, after receiving signals, knowing that others will delay too. Our results replicate the main features of the one previous experimental study of clock game (in two subject pools): Selling delays are shorter than predicted, but converge toward equilibrium predictions over repeated trials. We also find that delays are shorter in a dynamic game in which selling decisions unfold over time, compared to a static equivalent in which subjects precommit to selling decisions. A model of learning with growing anxiety after signal arrival can reproduce the empirical observations of shorter-than-predicted delay, smaller delay after later signal arrival, and shorter delays in dynamic games.

Item Type:Report or Paper (Working Paper)
Related URLs:
URLURL TypeDescription Paper
Camerer, Colin F.0000-0003-4049-1871
Additional Information:Preprint submitted to Elsevier. We thank the Lipper Family Foundation Fellowship, HFSP and Moore Foundation for financial support, and John Morgan for generous help supplying original data and software, and responding to questions.
Funding AgencyGrant Number
Lipper Family FoundationUNSPECIFIED
Human Frontier Science ProgramUNSPECIFIED
Gordon and Betty Moore FoundationUNSPECIFIED
Subject Keywords:Clock Games, Anxiety, Learning, Experimental Economics, Behavioural Game Theory, Price Bubbles
Series Name:Social Science Working Paper
Classification Code:JEL: C92, C72, D03.
Record Number:CaltechAUTHORS:20110308-152511187
Persistent URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:22722
Deposited By: Tony Diaz
Deposited On:21 Feb 2012 22:17
Last Modified:02 Jul 2020 18:40

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