Experimental Finance, anyone ???

Well, we had a guest talk today after an interval of quite some time. Today, we had Mr Shyam Sunder from Yale University down at IIM Indore trying to enlighten us as regards “How markets generate wealth?” He did this using a simple trading game which involved around 35 of the PGP participants. At the end of the game, it was conclusively proved that despite lack of adequate information, it is quite natural for markets to reach a convergent level wherein the profits of both the consumers and producers reach a point of convergence. Although the concept sounds simple enough, the way he proved it to us was quite an eye-opener.

He then went on to give us a lecture on “What we have learned from experimental finance?” Through this lecture, he explained the various ways in which experimental finance and experiments similar to the one he conducted with us in the morning help in explaining a whole lot of phenomenon in the assets and securities markets all round the world.

All in all, an awesome way to spend a day off, despite the fact that end-terms loom large round the corner.

Wish me luck……………..Jamster


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