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| Author: | Ackert, L.F. Church, B. Jayaraman, N. |
| Title: | An experimental study of circuit breakers: the effects of mandated market closures and temporary halts on market behavior |
| Journal: | Journal of Financial Markets
2001 : APR, VOL. 4:2, p. 185-208 |
| Index terms: | TRADING |
| Freeterms: | CIRCUIT BREAKERS EXPERIMENTAL ASSET MARKETS |
| Language: | eng |
| Abstract: | This paper analyzes the effect of circuit breakers on price behavior, trading volume, and profit-making ability in a market setting. They conduct nine experimental asset markets to compare behavior across three regulatory regimes: market closure, temporary halt, and no interruption. They find that the presence of a circuit breaker rule does not affect the magnitude of the absolute deviation in price from fundamental value or trading profit. The primary driver of price behavior is information. |
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