I love doing something similar with my small kids (4 and 2). I start laughing for no reason and when they see me laughing they start laughing. We laugh and have good time without any reason until we get tired. I also remember seeing some festival in India on TV. Everyone is laughing and having good time, for no reason.
Yes, with kids that works nice. Sometimes they are upset so I start to laugh for no reason until they cannot hold it anymore and start laughing as well. Well, sometimes they get even more upset, so use with caution.