Prior studies have observed that the attractiveness of playing a simple gamble (7/36 to win $9; otherwise win nothing) is greatly enhanced by introducing a small loss (7/36 win $9; otherwise lose 5¢). The present studies tested and confirmed an explanation of this finding based on the concept of...

We report two experiments which investigate whether experience of decision-making in repeated markets purges behavior of preference reversals. We investigate two behavioral mechanisms that may be shaping bids in repeated auctions: a tendency to adjust bids towards previously observed market...

The paper reports an experiment which tests the principle of separability, i.e. that behaviour in a dynamic choice problem is independent of history and of unreachable eventualities. Although this is a well-known principle of orthodox decision theory and central to conventional economic...

An extensive literature demonstrates the existence of framing effects in the laboratory and in questionnaire studies. This paper reports new evidence from a natural field experiment using a subject pool one may consider as particularly resistant to such effects: experimental economists. We find...

The paper reports an experiment which tests the principle of separability, i.e. that behaviour in a dynamic choice problem is independent of history and of unreachable eventualities. Although this is a standard principle of decision theory, it can be questioned on grounds suggested by...

We report the results of an experimental test for feedback-conditional regret effects using a naturally occurring gamble. The properties of this gamble are likely to engage decision-makers to a greater extent than conventional abstract laboratory gambles, and be more generally exhibited by real...

The game-theoretic assumption of ‘common knowledge of rationality’ leads to paradoxes when rationality is represented in a Bayesian framework as cautious expected utility maximisation with independent beliefs (ICEU). We diagnose and resolve these paradoxes by presenting a new class of formal...

This paper presents a new iterative procedure for solving finite noncooperative games, the reasoning-based expected utility procedure (RBEU), and compares this with existing iterative procedures. RBEU deletes more strategies than iterated deletion of strictly dominated strategies, while avoiding...

This paper makes three related contributions to noncooperative game theory: (i) a solution concept (the “ICEU solution”), which is generated by an iterative procedure that constructs trinary partitions of strategy sets and deals with problems arising from weak dominance; (ii) a class of models...

The game-theoretic assumption of ‘common knowledge of rationality’ leads to paradoxes when rationality is represented in a Bayesian framework as cautious expected utility maximization with independent beliefs (ICEU). We diagnose and resolve these paradoxes by presenting a new class of formal...