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Loss avoidance as selection principle: Evidence from simple stag-hunt games

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  • Rydval, Ondrej
  • Ortmann, Andreas

Abstract

We investigate experimentally the conjecture that loss avoidance solves the tension in stag-hunt games for which payoff dominance and risk dominance make conflicting predictions. Contrary to received textbook wisdom, money-losing outcomes do shift behavior, albeit not strongly, toward the payoff-dominant equilibrium.
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  • Rydval, Ondrej & Ortmann, Andreas, 2005. "Loss avoidance as selection principle: Evidence from simple stag-hunt games," Economics Letters, Elsevier, vol. 88(1), pages 101-107, July.
    • Handle: RePEc:eee:ecolet:v:88:y:2005:i:1:p:101-107
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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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