Tax Regimes and the Demand for Risky Assets: Some Experimental Market Evidence.

Key Points

• This research investigates how varying tax regimes affect the demand for risky assets in an experimental market setting.
• Experimental market created to test different tax regimes on asset demand.
• Analysis of both aggregate market behaviors and individual portfolio holdings.
• Comparison of findings with theoretical predictions on tax implications.
• Demand for risky assets generally aligns with theoretical expectations despite varying tax regimes.
• Market mechanisms lead to unpredicted shifts of tax benefits from buyers to sellers.
• Tax policy implications arise from the observed shifts and behaviors.