The impact of asset repurchases and issues in an experimental market

Ernan Haruvy, Charles N. Noussair, Owen Powell

Research output: Contribution to journalArticlepeer-review

24 Scopus citations


We create an experimental asset market in which the value of the shares is independent of the quantity outstanding, and find that (i) repurchases increase, whereas share issues decrease, the price of the asset. These effects are consistent with downward-sloping demand for the asset. (ii) This behavior is consistent with three trader types - fundamental, speculator, and momentum - interacting in the market. (iii) Share issues drive prices down toward, but not beyond, fundamental values. This downward resistance at the fundamental value is predicted by the impact of an intervention on the proportion of units and cash held by each trader type.

Original languageEnglish (US)
Pages (from-to)681-713
Number of pages33
JournalReview of Finance
Issue number2
StatePublished - Apr 2014
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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