Choices in the 11-20 game: the role of risk aversion
Summary: \textit{A. Arad} and \textit{A. Rubinstein} [``The 11-20 money request game: a level-k reasoning study, Am. Econ. Rev. 102, No. 7, 3561--3573 (2012; \url{doi:10.1257/aer.102.7.3561})] proposed the 11-20 money request game as an alternative to the P beauty contest game for measuring the depth of thinking. In this paper, we show theoretically that in the Nash equilibrium of the 11-20 game players are more likely to choose high numbers if they are risk-averse rather than risk neutral. Hence, the depth of thinking measured in the 11-20 game is biased by risk aversion. Based on a lab experiment, we confirm this hypothesis empirically.
- Risk averse behavior in generalized matching pennies games.
- Level-\(k\) reasoning and time pressure in the 11--20 money request game
- The effects of risk preferences in mixed-strategy equilibria of \(2\times \)2 games
- The two-person beauty contest
- Risk aversion and the Nash solution in stochastic bargaining experiments
- Risky choices in strategic environments: an experimental investigation of a real options game
- Endowment effects in the risky investment game?
- Gender differences when subjective probabilities affect risky decisions: an analysis from the television game show Cash Cab
- Level-\(k\) reasoning and time pressure in the 11--20 money request game
- Risk attitudes and the stag-hunt game
- Myopic risk-seeking: The impact of narrow decision bracketing on lottery play
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