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<center>{{efficient}}</center> | |||
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The purpose of this experiment was to present the class with a different game then they had been previously playing. While markets were often simulated in the classroom setting, there had not yet been a market established that used information to impact the trading platform. <br> | |||
It was through this input of information in the market that we hoped to track the drastic responses to information, and watch how the bid/ ask spreads were affected. By closely monitoring the bid/ ask spreads being used in the market, and by limiting the number of trades that could be made we were able to track the market reaction which closely resembled the theory of hindsight bias. Initially the bid/ask spreads in the market narrowed in relatively close to the true value of the asset simply through trading and viewing other teams bids. However, after new information came into the market, these bids began to widen and we saw completely changed strategies from certain teams. This is typically the case in any market, where new information causes great reaction, and only over time is the wide range in the market narrowed. <br> | |||
<p align="center">[[Image:Ben_Robss_final2.jpg|thumb|Description]] | |||
<center>{{efficient}}</center> | |||
Latest revision as of 02:19, 2 May 2006
The purpose of this experiment was to present the class with a different game then they had been previously playing. While markets were often simulated in the classroom setting, there had not yet been a market established that used information to impact the trading platform.
It was through this input of information in the market that we hoped to track the drastic responses to information, and watch how the bid/ ask spreads were affected. By closely monitoring the bid/ ask spreads being used in the market, and by limiting the number of trades that could be made we were able to track the market reaction which closely resembled the theory of hindsight bias. Initially the bid/ask spreads in the market narrowed in relatively close to the true value of the asset simply through trading and viewing other teams bids. However, after new information came into the market, these bids began to widen and we saw completely changed strategies from certain teams. This is typically the case in any market, where new information causes great reaction, and only over time is the wide range in the market narrowed.
