Compensation schemes, liquidity provision, and asset prices: an experimental analysis

Research, Preprint English OPEN
Baghestanian, Sascha; Gortner, Paul J.; Massenot, Baptiste;
(2015)
  • Publisher: Frankfurt a. M.: Goethe University Frankfurt, SAFE - Sustainable Architecture for Finance in Europe
  • Related identifiers: doi: 10.2139/ssrn.2613432
  • Subject: D03 | G02 | G12 | liquidity | experimental asset markets | C91 | compensation | C90 | bubbles | compensation,liquidity,experimental asset markets,bubbles
    • jel: jel:G12 | jel:D03 | jel:C91 | jel:C90 | jel:G02
      ddc: ddc:330

In an experimental setting in which investors can entrust their money to traders, we investigate how compensation schemes affect liquidity provision and asset prices. Investors face a trade-off between risk and return. At the benefit of a potentially higher return, they... View more
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