Interdependent security experiments
AbstractThis paper analyzes the behavior of subjects in interdependent security experiments which exhibit strategic complementarity. In these experiments, subjects decide whether to pay to mitigate the risk of a loss, but the exact risk depends on the actions of other subjects. Two ranked equilibria exist, and the efficient equilibrium is for all agents to pay for the mitigation. Subjects in the interdependent security experiments rarely coordinate on the efficient equilibrium. Coordination is slightly more common in similar coordination games without the risk mitigation decision. The experiments also compare the effectiveness of two policies at inducing higher levels of mitigation.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 30 (2010)
Issue (Month): 3 ()
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experiments; coordination game; risk mitigation; interdependent security;
Find related papers by JEL classification:
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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- Antonio FILIPPIN & Paolo CROSETTO, 2014.
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2014-01, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
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- Filippin, Antonio & Crosetto, Paolo, 2014. "A Reconsideration of Gender Differences in Risk Attitudes," IZA Discussion Papers 8184, Institute for the Study of Labor (IZA).
- Shafran, Aric P., 2012. "Learning in games with risky payoffs," Games and Economic Behavior, Elsevier, vol. 75(1), pages 354-371.
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