Quantum Risk Preferences in a Laboratory Experiment
This paper presents a quantum model of risk preferences that seeks to provide an explanation of the experimental results reported in Berninghaus, Todorova & Vogt (2012). The finding that subjects choose the risk-dominant strategy in a 2× 2 coordination game, on the average, more often, when they have previously completed a risk questionnaire, is not anticipated by the standard economic theory. The model presented in this paper demonstrates that the coordination game and the risk questionnaire can be analyzed as two decisions situations that do not commute and predicts that the order in which decisions are made will influence behavioral choices.
|Date of creation:||Oct 2012|
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- Starmer, Chris & Sugden, Robert, 1989. "Probability and Juxtaposition Effects: An Experimental Investigation of the Common Ratio Effect," Journal of Risk and Uncertainty, Springer, vol. 2(2), pages 159-78, June.
- Hey, John D & Orme, Chris, 1994. "Investigating Generalizations of Expected Utility Theory Using Experimental Data," Econometrica, Econometric Society, vol. 62(6), pages 1291-1326, November.
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- Siegfried K. Berninghaus & Lora R. Todorova & Bodo Vogt, 2012. "How Sensitive is Strategy Selection in Coordination Games?," FEMM Working Papers 120020, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
- Ariane Lambert Mogiliansky & Shmuel Zamir & Herve Zwirn, 2003. "Type Indeterminacy: A Model of the KT(Kahneman-Tversky)-man," Discussion Paper Series dp343, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
- Camerer, Colin F, 1989. "An Experimental Test of Several Generalized Utility Theories," Journal of Risk and Uncertainty, Springer, vol. 2(1), pages 61-104, April.
- Bostic, Raphael & Herrnstein, R. J. & Luce, R. Duncan, 1990. "The effect on the preference-reversal phenomenon of using choice indifferences," Journal of Economic Behavior & Organization, Elsevier, vol. 13(2), pages 193-212, March.
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