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How does risk tolerance vary with stake size? This important question cannot be adequately answered if framing effects … coherent change in relative risk aversion is observed for losses. The increase in relative risk aversion over gains cannot be …
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Risk ; Large Losses ; Natural Experiment …This study explores people's risk attitudes after having suffered large real-world losses following a natural disaster … is consistent with prospect theory predictions of the adoption of a risk-seeking attitude after a loss. -- Decision under …
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Players may categorize the strategies available to them. In many games there are different ways to categorize one's strategies (different frames) and which ones players use has implications for the outcomes realized. This paper proposes a model of agents who learn which frames to use through...
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decision making under risk. Both theories incorporate well-known deviations from Expected Utility Maximization such as the … Allais paradox or the fourfold pattern of risk attitudes. Stochastic Expected Utility Theory parsimoniously extends the …
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payoff-maximizing offer. By using a Risk Attitude test and a Probability Matching test, we show experimentally that the … proposers' attitude with respect to risk, as well as their ability to interpret and deal with probabilities may matter when it …
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