The Impact Of Speculative Liability On Asset Price Bubble Based On Experimental Evidence

With the development of financial market,more and more investors choose to enter the financial market through delegated investment.A lot of studies have pointed out that delegated investment will increase risk preference of decision-makers and trigger their ventures into speculation,which will eventually lead to bubbles.However,some studies have found the opposite.Studies have also shown that,professional financial consultants tend to choose riskier projects when making decisions on behalf of themselves or clients for higher return.In response to these disputes,this article introduces the concept of speculative liability,that is,decision makers invest a certain amount of their own funds in speculation,aiming to use economic experiments to explore the impact of changes in speculative liability on decision makers and bubbles.This article not only enriches the literature related to asset price bubbles,but may also provide certain policy reference opinions on bubble prevention.This article uses an experiment in which three traders sequentially trade a wellknown worthless asset to explore the impact of speculative liability on bubbles.This article first puts forward five inquiry questions based on research questions and experimental design,then use the behavioral experimental theory model to predict the answer,finally the theoretical predictions is verified by experimental results.The results showed that bubbles exist in all experiments.Traders’ willingness to speculate decreases as the increase in asset price increases the probability of being the last trader to be trapped.The dual pressures of asset price and increased speculative liability curb bubbles.In face of higher asset price,speculation is not significant,and the increase in speculative liability suppresses bubbles.Traders are more likely to speculate in face of lower asset price,and the increase in speculative liability intensifies bubbles.The results are generally consistent with predictions.In terms of personal decision-making,in face of increased speculative liability,some traders’ speculative willingness remains unchanged,some decreases,and some increases.This article analyzes that the differences between experimental results and theoretical predictions and the differences among individual decisions are due to the heterogeneity of traders’ response to return.