Various experimental procedures aimed at measuring individual risk aversion involve a list of pairs of alternative prospects. We first study the widely used method by Holt and Laury (2002), for which we find that the removal of some items from the lists yields a systematic decrease in risk...

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,...

Considering a pure coordination game with a large number of equivalent equilibria, we argue, first, that a focal point that is itself not a Nash equilibrium and is Pareto dominated by all Nash equilibria, may attract the players' choices. Second, we argue that such a non-equilibrium focal point...

Patients with stage-I (very mild and mild) Alzheimer’s disease were asked to participate in a Dictator Game, a type of game in which a subject has to decide how to allocate a certain amount of money between himself and another person. The game enables the experimenter to examine the influence...

In Selten (1967) “Strategy Method,” the second mover in the game submits a complete strategy. This basic idea has been exported to nonstrategic experiments, where a participant reports a complete list of contingent decisions, one for each situation or state in a given sequence, out of which...

We experimentally question the assertion of Prospect Theory that people display risk attraction in choices involving high-probability losses. Indeed, our experimental participants tend to avoid fair risks for large (up to € 90), high-probability (80%) losses. Our research hinges on a novel...

Does risk attitude (aversion or attraction) vary with the level of the income at risk? About half of our subjects chose to insure all levels, whereas another half chose instead not to insure low levels, but to insure high levels.

This paper introduces a mixture model based on the beta distribution, without preestablished means and variances, to analyze a large set of Beauty-Contest data obtained from diverse groups of experiments (Bosch-Domenech et al. 2002). This model gives a better t of the experimental data, and more...

Economics is the science of want and scarcity. We show that want and scarcity, operating within a simple exchange institution (double auction), are sufficient for an economy consisting of multiple inter--related markets to attain competitive equilibrium (CE). We generalize Gode and Sunder's...

Our work attempts to investigate the influence of credit tightness or expansion on activity and relative prices in a multimarket set-up. We report on some double- auction, two-market experiments where subjects had to satisfy an inequality involving the use of credit. The experiments display two...