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Heterogeneity of Beliefs and Trading Behavior: A Reexamination

Published online by Cambridge University Press:  14 February 2023

Sascha Füllbrunn
Radboud University, Department of Economics and Business Economics
Christoph Huber*
WU Vienna University of Economics and Business, Institute for Markets and Strategy
Catherine Eckel
Texas A&M University, Department of Economics
Utz Weitzel
Radboud University, Department of Economics and Business Economics and Vrije Universiteit Amsterdam, Department of Finance and Vrije Universiteit Amsterdam, Department of Finance
* (corresponding author)
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Combining experimental data sets from seven individual studies, including 255 asset markets with 2,031 participants, and 36,326 short-term price forecasts, we analyze the role of heterogeneity of beliefs in the organization of trading behavior by reproducing and reconsidering earlier experimental findings. Our results confirm prior evidence that price expectations affect trading behavior. However, heterogeneity in beliefs does not seem to drive overpricing and asset market bubbles, as suggested by earlier studies, and we find no indication of short-term beliefs being better determinants of trading behavior than longer-term beliefs.

Research Article
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This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (, which permits unrestricted re-use, distribution and reproduction, provided the original article is properly cited.
© The Author(s), 2023. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington


We thank an anonymous reviewer and Jarrad Harford (the editor) as well as conference participants at 2022 Experimental Finance and the 2022 Behavioral Macroeconomics Workshop for helpful comments and suggestions. We also thank Tim Carlé and Tibor Neugebauer for clarifying details about their original analyses as well as Eric Guerci and Michelle Song for making the full data sets from Holt, Porzio, and Song (2017) and Duchêne, Guerci, Hanaki, and Noussair (2019) available. CRediT author statement: Conceptualization and Methodology: S.F., C.H., U.W.; Data curation, formal analysis, investigation, visualization, validation, and writing original draft: S.F., C.H.; Writing – review and editing: all authors. All errors are our own.


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Supplementary material: Link

Füllbrunn et al. Dataset