Time: 10:45AM-12:00PM November 17，2023

Venue: IB 1051

Speaker: Lawrence Choo (Southwestern University of Finance and Economics)

Host: Prof Gergely Horvath, Associate Professor of Economics at the Duke Kunshan University

Speaker’s bio:

Dr. Lawrence Choo is an associate professor of economics at the China Center for Behavioral Economics and Finance @ Southwestern University of Finance and Economics.

His research uses experiments to better understand how group behaviour is influenced by social norms, market interactions and the use of prediction markets. He is also interested in basic game theoretic issues, experimental methodology and modelling bounded-rationality behaviour in strategic interactions.

His research has been published in journals such as Management Science, European Economic Reviews, Journal of Economic Behavior & Organization and Experimental Economics

Abstract:

We use an experiment to study the information aggregation properties of markets when diverse and partial information about the true state of the world is held by informed traders spread across separated markets. We find that prices in the different markets can accurately reflect the true state when there are uninformed “information” intermediaries who are able to trade in multiple markets.  We show that intermediaries with no prior information about the true state can facilitate its discovery across the different markets even when they have no incentives to do so.  Furthermore, the accuracy of market prices does not depend on the degree of competition among the intermediaries. Overall, we show market prices can be informative even in the presence of market segmentation or fragmentation.