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more risk averse opponent. In a laboratory experiment we confirm both, the non-monotonic impact and the compensating effect …
Persistent link: https://www.econbiz.de/10012949244
Theories about unique equilibrium selection are often rejected in experimental investigations. We drop the idea of selecting a single prominent equilibrium but suggest the coexistence of different beliefs about "appropriate" equilibrium or non-equilibrium play. Our main selection criterion is...
Persistent link: https://www.econbiz.de/10011629780
In this paper we use an experiment to compare a theory of risk aversion and a theory of spite as an explanation for …
Persistent link: https://www.econbiz.de/10012002983
effort. In an experiment in which the rate of effort needed to achieve the standard was held constant, participants facing …
Persistent link: https://www.econbiz.de/10012854791
Starting from Schelling (1960), several game theorists have conjectured that payoff equity might facilitate coordination in normal-form games with multiple equilibria - the more equitable equilibrium might be selected either because fairness makes it focal or because many individuals dislike...
Persistent link: https://www.econbiz.de/10010224794
This paper examines the effect of imperfect labor market competition on the efficiency of compensation schemes in a setting with moral hazard and risk-averse agents who have private information on their ability. Two heterogenous firms - characterized by vertical, respectively horizontal,...
Persistent link: https://www.econbiz.de/10012253127
We study the long-run behavior of an economy where agents who are heterogeneous with respect to risk attitudes can either earn a certain income or enter a risky rent seeking contest. In contrast with standard evolutionary game theory, we distinguish between utility and material payoffs, and...
Persistent link: https://www.econbiz.de/10014109935
I develop a model of strategic entry by candidates for office in runoff elections under aggregate uncertainty. I introduce aggregate uncertainty by making candidates unsure of the distribution of voter preferences in the electorate. The set of three candidate equilibria expands and equilibrium...
Persistent link: https://www.econbiz.de/10012921841
We introduce a model with strategic voting in a parliamentary election with proportional representation and uncertainty about voters' preferences. In any equilibrium of the model, most voters only vote for those parties whose positions are extreme. In the resulting parliament, a consensus...
Persistent link: https://www.econbiz.de/10013039780
The paper examines how rules and institutions as well as the monetary-fiscal coordination setup impact welfare outcomes of a reform during uncertainty shocks. We define uncertainty shocks as sudden events that create ambiguity about future course of economic policies chosen by policy makers as...
Persistent link: https://www.econbiz.de/10012827927