Irrational exuberance and neural crash warning signals during endogenous experimental market bubbles.

ABSTRACT: Groups of humans routinely misassign value to complex future events, especially in settings involving the exchange of resources. If properly structured, experimental markets can act as excellent probes of human group-level valuation mechanisms during pathological overvaluations--price bubbles. The connection between the behavioral and neural underpinnings of such phenomena has been absent, in part due to a lack of enabling technology. We used a multisubject functional MRI paradigm to measure neural activity in human subjects participating in experimental asset markets in which endogenous price bubbles formed and crashed. Although many ideas exist about how and why such bubbles may form and how to identify them, our experiment provided a window on the connection between neural responses and

SUBMITTER: Smith A 

PROVIDER: S-EPMC4115519 | biostudies-literature | 2014 Jul

REPOSITORIES: biostudies-literature