  We run experimental asset markets to investigate the emergence of excess
trading and the occurrence of synchronised trading activity leading to crashes
in the artificial markets. The market environment favours early investment in
the risky asset and no posterior trading, i.e. a buy-and-hold strategy with a
most probable return of over 600%. We observe that subjects trade too much, and
due to the market impact that we explicitly implement, this is detrimental to
their wealth. The asset market experiment was followed by risk aversion
measurement. We find that preference for risk systematically leads to higher
activity rates (and lower final wealth). We also measure subjects' expectations
of future prices and find that their actions are fully consistent with their
expectations. In particular, trading subjects try to beat the market and make
profits by playing a buy low, sell high strategy. Finally, we have not detected
any major market crash driven by collective panic modes, but rather a weaker
but significant tendency of traders to synchronise their entry and exit points
in the market.
