Experimental Economics: How to Build a Perfect Financial Market

Author: Miller
Publisher:
Publish Date: 2006-08-01
Features: This book explores the unfinished business of capitalism. As one country after another replaced central planning with markets, Wall Street continued to experience booms and a series of painful, even desperate, events. Traditional financial and economic analysis rarely comforts investors, whose irrationality is often blamed as a scapegoat for market problems. Miller elaborates on the experimental economics research he participated in. This is a new field that examines the interaction between markets and human behavior under controlled conditions. Experimental economics has already demonstrated the ability to replicate the formation and bursting of stock market bubbles in laboratories worldwide. When psychological factors can be identified as explanations for market issues, experimenters have found that even minor changes in the rules governing the market can lead to vastly different outcomes. A natural byproduct of experimental economics is the creation of "smart markets" to overcome market flaws. Miller explains the reasons behind the cyclical booms and busts in financial markets and makes bold predictions about their future trajectory. Whether you aim to better manage your investment portfolio or gain insight into the secrets of how financial markets operate, reading this book will broaden your perspective and help you understand the inner workings of Wall Street and the global economy.