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Can Asset Markets be Manipulated? A Field Experiment with Racetrack Betting

Camerer, Colin F. (1996) Can Asset Markets be Manipulated? A Field Experiment with Racetrack Betting. Social Science Working Paper, 983. California Institute of Technology , Pasadena, CA. (Unpublished) http://resolver.caltech.edu/CaltechAUTHORS:20170815-154108288

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Abstract

To test whether naturally-occurring markets can be strategically manipulated, $500 bets were made at a large racetrack, then cancelled. The net effects of these costless bets gives clues about whether market participants react to information potentially contained in large bets. While the bets moved odds on "attack" horses visibly (compared to matched-pair control horses with similar pre-bet odds), the net effect on betting was close to zero. A second study with $1000 bets at a smaller track replicated the result. These markets could not be successfully manipulated, indicating that bettors did not mistakenly infer information from the experimental bets.


Item Type:Report or Paper (Working Paper)
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http://resolver.caltech.edu/CaltechAUTHORS:20090918-113839028Related ItemPublished Version
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Camerer, Colin F.0000-0003-4049-1871
Additional Information:Wonderful research assistance was provided by Jessica San-San Tien, Dov and Amanda Rosenberg, and Hongjai Rhee. Excellent secretarial work was done by Gail Nash. Helpful comments were received from the MacArthur Foundation Preferences Group, the Russell Sage Foundation Behavioral Economics Summer Camp (Berkeley, 9/96), and discussions with Teck Ho, Hongjai Rhee, Charles Plott and Simon Wilkie. Preparation for this research was provided by Rich Palmer and Burt Camerer (who taught me to ask "why is that?"). Published as Camerer, Colin F. (1998) Can Asset Markets Be Manipulated? A Field Experiment With Racetrack Betting. Journal of Political Economy, 106 (3). pp. 457-482.
Group:Social Science Working Papers
Subject Keywords:Experimental Economics; Information aggregation; Field experiment; Market manipulation
Classification Code:JEL: O51
Record Number:CaltechAUTHORS:20170815-154108288
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20170815-154108288
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80440
Collection:CaltechAUTHORS
Deposited By: Jacquelyn Bussone
Deposited On:16 Aug 2017 16:47
Last Modified:16 Aug 2017 16:47

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