Journal
GAMES AND ECONOMIC BEHAVIOR
Volume 45, Issue 1, Pages 97-113Publisher
ACADEMIC PRESS INC ELSEVIER SCIENCE
DOI: 10.1016/S0899-8256(03)00052-6
Keywords
matching pennies; quantal response equilibrium; risk aversion; experiment
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In experimental studies of behavior in 2 x 2 games with unique mixed strategy equilibria, observed choice frequencies are systematically different from mixed-strategy Nash predictions. This paper examines experimental results for a variety of such games, and shows that a structural econometric model which incorporates risk aversion into a quantal response equilibrium explains the data very well. Moreover, risk aversion estimates are stable across the different games and are close to those obtained from laboratory and field auction data, as well as from individual lottery choice experiments. (C) 2003 Elsevier Inc. All rights reserved.
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