Speculation Rather than Enterprise ? Keyness Beauty Contest Revisited in Theory and Experiment - Université de Lorraine Access content directly
Journal Articles SSRN : Social Science Research Network Year : 2017

Speculation Rather than Enterprise ? Keyness Beauty Contest Revisited in Theory and Experiment

Abstract

In Keynes’ beauty contest, agents make evaluations reflecting both an expected fundamental value and the conventional value expected to be set by the market. They thus respond to fundamental and coordination motives, respectively, the prevalence of either being set exogenously. Our contribution is twofold. First, we propose a valuation game in which agents strategically choose how to weight each motive. This game emphasises public information leads agents to favour the coordination motive. Second, we test the game through a laboratory experiment. Subjects tend to conform to theoretical predictions, except when fundamental uncertainty is low relative to strategic uncertainty.
No file

Dates and versions

hal-02510843 , version 1 (18-03-2020)

Identifiers

Cite

Kene Boun My, Camille Cornand, Rodolphe dos Santos Ferreira. Speculation Rather than Enterprise ? Keyness Beauty Contest Revisited in Theory and Experiment. SSRN : Social Science Research Network, 2017, 48 p. ⟨10.2139/ssrn.2929999⟩. ⟨hal-02510843⟩
50 View
0 Download

Altmetric

Share

Gmail Facebook X LinkedIn More