
Players are endowed with cash as well as shares that pay a random per-period dividend. Each period, players have an opportunity to buy and sell these shares.
Key Learning Objectives:
- Bubble Formation: Highlights the determinants of an asset’s value; income generated and terminal (resale) value.
- Bubble Formation and Experience: Experience reduces, but may not eliminate, the formation of speculative bubbles.
- Asset Pricing: With risk neutral investors, an asset's fundamental value is the present discounted value of expected dividends (plus discounted terminal value, if applicable).
- Main Courses: macroeconomics; finance
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