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Individual Irrationality and Aggregate Outcomes

Fehr, Ernst; Tyran, Jean-Robert - Institut für Volkswirtschaftslehre, …

There is abundant evidence that many individuals violate the rationality assumptions routinely made in economics …. However, powerful evidence also indicates that violations of individual rationality do not necessarily refute the aggregate … predictions of standard economic models that assume full rationality of all agents. Thus, a key question is how the interactions …

Persistent link: https://www.econbiz.de/10005627960

Risk and Rationality: The Effect of Incidental Mood on Probability Weighting

Fehr, Helga; Epper, Thomas; Bruhin, Adrian; Schubert, Renate - Institut für Volkswirtschaftslehre, … - 2007

When valuing risky prospects, people tend to overweight small probabilities and to underweight large probabilities. Nonlinear probability weighting has proven to be a robust empirical phenomenon and has been integrated in decision models, such as cumulative prospect theory. Based on a laboratory...

Persistent link: https://www.econbiz.de/10005756644

Measuring Social Norms and Preferences using Experimental Games: A Guide for Social Scientists

Camerer, Colin F.; Fehr, Ernst - Institut für Volkswirtschaftslehre, …

Experimental games turned out to be remarkably productive tools for examining the nature of social preferences and social norms. This paper describes the methods and tools of experimental game theory and provides a selection of games that have been useful. We also discuss the role of...

Persistent link: https://www.econbiz.de/10005585655

Appropriating the Commons - A Theoretical Explanation

Falk, Armin; Fehr, Ernst; Fischbacher, Urs - Institut für Volkswirtschaftslehre, …

In this paper we show that a simple model of reciprocal preferences explains major experimental regularities of common pool resource (CPR) experiments. The evidence indicates that in standard CPR games without communication and without sanctioning possibilities inefficient excess appropriation...

Persistent link: https://www.econbiz.de/10005585660

A unified approach to comparative statics puzzles in experiments

Schmutzler, Armin - Institut für Volkswirtschaftslehre, … - 2006

Many experimental studies implement two versions of one game for which agents’ behavior is fundamentally different even though the Nash prediction is the same. This paper provides a novel explanation of such findings. Starting from the observation that many of the games under consideration...

Persistent link: https://www.econbiz.de/10005756610

Learning in and about Games

Gerber, Anke - Institut für Volkswirtschaftslehre, …

We study finitely repeated 2 / 2 normal form games, where players have incomplete information about their opponents’ payoffs. In a laboratory experiment we investigate whether players (a) learn the game they are playing, (b) learn to predict the behavior of their opponent, and (c) learn to...

Persistent link: https://www.econbiz.de/10005184880

Probabilistic Choice and Stochastic Dominance

Blavatskyy, Pavlo R. - Institut für Volkswirtschaftslehre, … - 2008

This paper presents an axiomatic model of probabilistic choice under risk. In this model, when it comes to choosing one …

Persistent link: https://www.econbiz.de/10005627944

Stochastic Choice Under Risk

Blavatskyy, Pavlo R. - Institut für Volkswirtschaftslehre, … - 2006

theory such as the fourfold pattern of risk attitudes, the discrepancy between certainty equivalent and probability …

Persistent link: https://www.econbiz.de/10005627956

Models of Stochastic Choice and Decision Theories: Why Both are Important for Analyzing Decisions

Blavatskyy, Pavlo; Pogrebna, Ganna - Institut für Volkswirtschaftslehre, … - 2007

Economic research offers two traditional ways of analyzing decision making under risk. One option is to compare the …

Persistent link: https://www.econbiz.de/10005628002

How Much Internalization of Nuclear Risk Through Liability Insurance?

Schneider, Yves; Zweifel, Peter - Institut für Volkswirtschaftslehre, … - 2002

An important source of conflict surrounding nuclear energy is that with a very small probability, a large-scale nuclear accident may occur. One way to internalize the financial risks associated with such an accident is through mandatory liability insurance. This paper presents estimates of the...

Persistent link: https://www.econbiz.de/10005756630