This paper presents results from an experiment designed to study the effect of self reporting risk preferences on strategy choices made in a subsequently played 2x2 coordination game. The main finding is that the act of answering a questionnaire about one's own risk preferences significantly...

The St. Petersburg Paradox is one of the oldest violations of expected utility theory. Thus far, explanations of the paradox aim at small probabilities being perceived as zero and the boundedness of utility. This paper provides experimental results showing that neither risk attitudes nor...

In this paper, the preference reversal phenomenon known from risk research is investigated according to which subjects prefer gamble A over B in competitive decisions although they reveal higher valuations in terms of a cash equivalent (CE) or a willingness to pay (WTP) for the latter when...

This experiment investigates decisions made by prospective economists and physicians in an allocation problem which can be framed either medically or neutrally. The potential recipients differ with respect to their minimum needs as well as to how much they benefit from a treatment. We classify...

This paper presents results from an experiment designed to study the effect of self reporting risk preferences on strategy choices made in a subsequently played 2 X 2 coordination game. The main finding is that the act of answering a questionnaire about one's own risk preferences significantly...

We suggest a simple asset market model in which we analyze competitive and strategic behavior simultaneously. If two-fund separation is found to hold across periods for competitive behavior, it also holds for strategic behavior. In this case the relative prices of the assets do not depend on...

Based on an experimental analysis of a simple monetary economy we argue that a monetary system is more stable than one would expect from individual rationality. Weshow that positive reciprocity stabilizes the monetary system, provided everyparticipant considers accepting money as a reasonable...

This paper contributes to the micro-foundation of money in centralizedmarkets with idiosyncratic uncertainty. It shows existence of stationarymonetary equilibria and ensures that there is an optimum quantity ofmoney. The rational solution of our model is compared with actual be-havior in a...

We explain excess volatility, short-term momentum and long-term reversal of asset prices by a repeated game version of Keynes beauty contest. In every period the players can either place a buy or sell order on the asset market. The actual price movement is determined by average market orders and...