Expert information, economic rumors, and market self-organization: A lab study

Findings from laboratory studies with human participants often carry over to the real world. Here we analyze data from an economic experiment and show that introducing relevant expert information makes a lab market more chaotic, while connecting people via a virtual social network reduces chaos and increases self-organization. The latter may be of little value though, if a ‘consensus’ is built around rumors rather than facts. In contrast, when competent participants are exposed to both expert information and social network influence, the former factor dominates their choice behavior.