Positive expectations feedback experiments and number guessing games as models of financial markets (revised version of WP 08-07)

In repeated number guessing games choices typically converge quickly to the Nash equilibrium. In positive expectations feedback experiments, however, convergence to the equilibrium price tends to be very slow, if it occurs at all. Both types of experimental designs have been suggested as modeling essential aspects of financial markets. In order to isolate the source of the differences in outcomes we present several new treatments in this paper. We conclude that the feedback strength (i.e. the ‘p-value’ in standard number guessing games) is essential for the results. Furthermore, positive expectations feedback experiments may provide good representations of highly speculative markets while standard number guessing games model financial markets with more emphasis on dividend yield and value stocks.

The mechanism of pyridine hydrogenolysis on molybdenum-containing catalysts : III. Cracking, hydrocracking, dehydrogenation and disproportionation of pentylamine

The conversion of pentylamine on a MoO3-Al2O3 catalyst was studied between 250 and 350 °C, at various hydrogen pressures. The reactions observed were cracking to pentene and ammonia, hydrocracking to pentane and ammonia, dehydrogenation to pentanimine and butylcarbonitrile, and disproportionation to ammonia and dipentylamine.\ud \ud The equilibrium between pentylamine, dipentylamine and ammonia appeared to be established under most of the experimental conditions. The equilibrium constant is about 9 at 250 °C and about 5 at 320 °C. The disproportionation reaction is zero order in hydrogen and of −1 order in the initial pentylamine pressure.\ud \ud Dehydrogenation was observed at low hydrogen pressures, and especially at higher temperatures; the reaction is first order in pentylamine.\ud \ud Both cracking and hydrocracking take place, mainly above 300 °C. Hydrocracking appears to be half order in hydrogen; the rate of cracking is almost independent of the hydrogen pressure. The hydrocarbon formation is of zero order in pentylamine or dipentylamine.\ud \ud The same type of reactions (except hydrocracking) take place on alumina, but with a far lower reaction rate

The mechanism of pyridine hydrogenolysis on molybdenum-containing catalysts : IV. The conversion of piperidine

The conversion of piperidine was investigated on a CoO-MoO3-Al2O3 catalysts as a function of the temperature, reaction time, initial piperidine partial pressure and the hydrogen pressure.\ud \ud At 60 atm of hydrogen and conversions below 50% piperidine is selectively converted to ammonia and N-pentylpiperidine. This reaction appears to be a two-step process, ring-opening to pentylamine followed by a fast alkyl transfer from pentylamine to piperidine. The piperidine conversion is first order in piperidine as well as in hydrogen, and of -1 order in the total pressure of the nitrogen bases.\ud At higher conversions the rate of formation of pentane and ammonia are influenced by the rate of the (hydro)cracking steps, and also by the equilibrium constants of the alkyl transfer equilibria. The rate of a (hydro)cracking reaction is lower when a ring is present in the nitrogen base. The activation energies of these reactions were 160 kJ mol−1, about 60 kJ mol−1 greater than those of alkyl transfer reactions.\ud At 1 atm of hydrogen the product composition was completely different from that observed at higher pressures of hydrogen.\ud The mechanism of the reactions is briefly discussed

The influence of the precipitation rate on the properties of porous chromia

The properties were studied of heated (320°C) chromia samples, prepared by two precipitation methods: \ud \ud 1. (1) addition of ammonia to chromium salt solutions,\ud 2. (2) OH− formation in chromium salt solutions through hydrolysis of urea.\ud \ud Samples formed by means of the first method are macro or mesoporous and have a lower specific surface area (~200 m2·g−1) than those formed by urea hydrolysis (~300 m2·g−1). Only in the case of a very slow addition of the ammonia solution these properties of the chromia's become equal. Experiments show that the micro porous type samples with high surface area are only formed if the pH range 5.1 to 5.7 is passed slowly. The formation of polychromium complexes of uniform size is suggested.\ud \u

Price Stability and Volatility in Markets with Positive and Negative Expectations Feedback: An Experimental Investigation

The evolution of many economic variables is affected by expectations that economic agents have with respect to the future development of these variables. Here we show, by means of laboratory experiments, that market behavior depends to a large extent on how the realized market price responds to an increase in average price expectations. If it responds by decreasing, as in commodity markets, prices converge quickly to their equilibrium value, confirming the rational expectations hypothesis. If the realized price increases after an increase of average expectations, as is typical for financial markets, large fluctuations in realized prices are likely.

Individual Expectations, Limited Rationality and Aggregate Outcomes

Recent studies suggest that the type of strategic environment or expectation feedback may have a large impact on whether the market learns the rational fundamental price. We present an experiment where the fundamental price experiences large unexpected shocks. Markets with negative expectation feedback (strategic substitutes) quickly converge to the new fundamental, while markets with positive expectation feedback (strategic complements) do not converge, but show under-reaction in the short run and over-reaction in the long run. A simple evolutionary selection model of individual learning explains these differences in aggregate outcomes.

The mechanism of pyridine hydrogenolysis on molybdenum-containing catalysts : II. Hydrogenation of pyridine to piperidine

The kinetics of pyridine hydrogenation was studied at high hydrogen pressures on a Mo-Al oxide and a Co-Mo-Al oxide catalyst. The rate equation was found to be r = kPpyrPH2n/Ppyro, in which n is 1.5 at 300 and 375 °C and 1.0 at 250 °C. This rate equation can be derived assuming strong adsorption of pyridine and its products with identical adsorption constants.\ud The (hydro)cracking of piperidine appears to have a low order in hydrogen, probably lower than 0.5.\ud The adsorption behavior of nitrogen bases and hydrogen on alumina and the molybdenum-containing catalysts was investigated by the gas chromatographic method. The adsorption of the nitrogen bases appeared to be very strong on both catalysts, and varied in the order piperidine > pyridine > ammonia.\ud Hydrogen also showed a strong adsorption. Hydrogen and nitrogen bases appeared to adsorb on different sites

Forming price expectations in positive and negative feedback systems

We analyse the results of an experiment on expectation formation carried out last year (i.e., 2003) in the CREED laboratory in Amsterdam. The experiment involved 78 participants, who were asked to predict prices in artificial single-good economies, and were paid according to their accuracy in doing so. Thirteen markets, with six subjects each, were created, in two different treatments. The first treatment concerns a Cobweb-like commodity market with supply-driven expectations feedback. The second treatment concerns a speculative asset market with demanddriven expectations feedback. In the first treatment price fluctuations are relatively stable, quickly converging to the Rational Expectations fundamental value. In the second treatment prices do not converge quickly, but tend to display a slow oscillation around the fundamental price. An important factor in generating these differences is shown to be the strong coordination of price predictions among participants. This suggests a large degree of homogeneity in the expectation rules applied by the participants, which was confirmed by explicitly fitting the individual predictions to a linear adaptive autoregressive specification.

The mechanism of pyridine hydrogenolysis on molybdenum-containing catalysts : I. The monolayer MoO3-Al2O3 catalyst: Preparation and catalytic properties

Preparation of a MoO3-Al2O3 catalyst with a monolayer of molybdenum oxide on the alumina was possible by adsorbing MoO2(OH)2 at 600°C from the gas phase. From the amounts of molybdenum adsorbed and the surface areas of the catalysts a characteristic value of 17Å2 was calculated for the area occupied by one MoO3 molecule. Longer times of preparation and high partial pressures of MoO2(OH)2 yielded an aluminum molybdate (Al2O3·3MoO3) as evidenced by X-ray analysis. High coverage of the alumina with molybdenum oxide was also possible by adsorbing polymolybdate ions from acid solutions