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To study coordination in complex social systems such as financial markets, the authors introduce a new prediction market set-up that accounts for fundamental uncertainty. Nonetheless, the market is designed so that its total value is known, and thus its rationality can be evaluated. In two...
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We investigate various statistical methods for forecasting risky choices and identify important decision predictors. Subjects (n=44) are presented a series of 50/50 gambles that each involves a potential gain and a potential loss, and subjects can choose to either accept or reject a displayed...
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Can luck predict risk-taking behavior in games of chance? Economists have not widely studied this issue although … good and bad luck outcomes in a simple repeated risky investment game affect risk-taking behavior in the following rounds … demonstrate a strong impact of luck on risk-taking behavior that lasts not only to the next round but also into another two follow …
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