An experimental study of circuit breakers: the effects of mandated market closures and temporary halts on market behavior

This paper analyzes the effect of circuit breakers on price behavior, trading volume, and profit-making ability in a market setting. We conduct nine experimental asset markets to compare behavior across three regulatory regimes: market closure, temporary halt, and no interruption. 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 behavior is information asymmetry in the market. By comparison, trading activity is significantly affected by the presence of a circuit breaker. Mandated market closures cause market participants to advance trades.Financial markets ; Flow of funds ; Stock market

Circuit breakers with uncertainty about the presence of informed agents: I know what you know . . . I think

This study conducts experimental asset markets to examine the effects of circuit breaker rules on market behavior when agents are uncertain about the presence of private information. Our results unequivocally indicate that circuit breakers fail to temper unwarranted price movements in periods without private information. Agents appear to mistakenly infer that others possess private information, causing price to move away from fundamental value. Allocative efficiencies in our markets are high across all regimes. Circuit breakers perform no useful function in our experimental asset markets.Markets ; Financial markets ; Risk

An Experimental Study of Circuit Breakers: The Effects of Mandated Market Closures and Temporary Halts on Market Behavior

This paper analyzes the effect of circuit breakers on price behavior, trading volume, and profit-making ability in a market setting. We conduct nine experimental asset markets to compare behavior across three regulatory regimes: market closure, temporary halt, and no interruption. We 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. By comparison, trading activity is significantly affected by the presence of a circuit breaker. Market participants advance trades when a trading interruption is imminent

Circuit breakers with uncertainty about the presence of informed agents: I know what you know . . . I think

This study conducts experimental asset markets to examine the effects of circuit breaker rules on market behavior when agents are uncertain about the presence of private information. Our results unequivocally indicate that circuit breakers fail to temper unwarranted price movements in periods without private information. Agents appear to mistakenly infer that others possess private information, causing price to move away from fundamental value. Allocative efficiencies in our markets are high across all regimes. Circuit breakers perform no useful function in our experimental asset markets

An experimental study of circuit breakers: the effects of mandated market closures and temporary halts on market behavior

This paper analyzes the effect of circuit breakers on price behavior, trading volume, and profit-making ability in a market setting. We conduct nine experimental asset markets to compare behavior across three regulatory regimes: market closure, temporary halt, and no interruption. 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 behavior is information asymmetry in the market. By comparison, trading activity is significantly affected by the presence of a circuit breaker. Mandated market closures cause market participants to advance trades

Results from the Indo-USSR ozonesonde intercomparison experiment

A total of seventeen vertical profiles of ozone were obtained during an Indo-USSR collaborative experiment on ozonesonde intercomparison conducted at Thumba during March 1983. The vertical distribution of ozone was measured using rocket-borne, balloon-borne as well as ground-based instruments. Four different rocket ozonesondes from India and USSR and the balloon ozonesonde were used to makein situ observations of ozone concentrations in addition to the Dobson spectrophotometric observations of total ozone and Umkehr. The rocket and the balloon launchings were effected in three salvos and measurements were made at different times of the day as well as during night. The results of all these measurements are used to obtain a mean ozone vertical distribution over Thumba foT the spring equinoxial period. The mean profile shows the maximum ozone concentration at 27 km with a value of (3.86±0-52)×1012 molecules per cc. Comparison of this mean profile with available satellite data for the equatorial regions shows that, in general, the Thumba values are lower by 10–15% at altitudes below 40 km and larger at altitudes above 50 km compared to the satellite results. The data also show evidence for a day-to-day variability and a possible day-to-night variability in the ozone vertical distribution with the night-time values higher than the daytime values at all altitudes above 35 km and the difference is found to increase with the increasing altitude

Stock authorizations: A sequential equilibrium analysis

We develop a sequential equilibrium model of the common stock authorization process. We provide conditions under which actions that increase the number of slack shares, such as stock authorizations, generate negative announcement effects