Excess entry refers to the high failure rate of new entrepreneurial ventures. Economic explanations suggest 'hit and run' entrants and risk-seeking behavior. A psychological explanation is that people (entrepreneurs) are overconfident in their abilities (Camerer & Lovallo, 1999). Characterizing...

This paper presents a test of the predictive validity of various classes of QALY models (i.e., linear, power and exponential models). We first estimated TTO utilities for 43 EQ-5D chronic health states and next these states were embedded in health profiles. The chronic TTO utilities were then...

Are poor people more or less likely to take money risks than wealthy folks? We find that risk attraction is more prevalent among the wealthy when the amounts of money at risk are small (not surprising, since ten dollars is a smaller amount for a wealthy person than for a poor one), but,...

While the theoretical industrial organization literature has long argued that excess capacity can be used to deter entry into markets, there is little empirical evidence that incumbent firms effectively behave in this way. Bagwell and Ramey (1996) propose a game with a specific sequence of moves...

Confidence in decision making is an important dimension of managerial behavior. However, what is the relation between confidence, on the one hand, and the fact of receiving or expecting to receive feedback on decisions taken, on the other hand? To explore this and related issues in the context...

The effectiveness of decision rules depends on characteristics of both rules and environments. A theoretical analysis of environments specifies the relative predictive accuracies of the lexicographic rule 'take-the-best' (TTB) and other simple strategies for binary choice. We identify three...

Recent research has highlighted the notion that people can make judgments and choices by means of two systems that are labeled here tacit (or intuitive) and deliberate (or analytic). Whereas most decisions typically involve both systems, this chapter examines the conditions under which each...

We perform an experiment on a pure coordination game with uncertainty about the payoffs. Our game is closely related to models that have been used in many macroeconomic and financial applications to solve problems of equilibrium indeterminacy. In our experiment each subject receives a noisy...

We test whether risk attitudes change when losses instead of gains are involved. The study of gain-loss asymmetries has been largely confined to “reflected” choices, where all the money amounts of a positive prospect are multiplied by minus one. We define the decomposition “reflection =...

In this paper we provide a full characterization of the pure-strategy Nash Equilibria for the p-Beauty Contest Game when we restrict player’s choices to integer numbers. Opposed to the case of real number choices, equilibrium uniqueness may be lost depending on the value of p and the number of...