This thesis examines the effects of biases on investment decisions and risky asset prices using laboratory asset markets. A bias is a systematic error in decision-making and can be caused by many factors. In contrast to unsystematic errors, biases affect investor behaviour directionally and do not cancel each other out. Hence, a bias can cause asset prices to deviate from fundamental values, with potentially detrimental effects for investors and economies. This thesis examines three possible sources for biased decision-making, that is, it considers bias caused:• by option-like compensation: tournament behaviour• by probability judgement error: the gambler’s fallacy• when feelings affect information processing: mood misattribution.

Year Manuscript Completed



Finance and Financial Management | Portfolio and Security Analysis


Behavioural Finance; Experimental Finance; Risk-Taking; Tournament Behaviour; Gamblers Fallacy; Mood Misattribution; Cognitive Bias.

Primary Language of Manuscript


01Front.pdf (246 kB)