A theory of focal points

Article Abstract:

A theory of focal points that involves a distinction between the inherent structure of a game and the manner such a game is understood by each player is presented. A label is used to identify each player's strategy which has been defined according to his understanding of the game. The choice of a label and a decision rule by the player is interlinked. The choice is evaluated according to a standard of collective rationality.

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Risk aversion in contests

Article Abstract:

The hypothesis that the participants in a game or contest who are relatively afraid of risk will usually win is tested. This situation runs true under situations of limited liability. However, when such conditions are eliminated, the risk aversion factor does not count in prize winning. In the case of prize sharing where effort serves as a determinant, risk aversion also plays no role in the result.

Risk perception

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Decisions, error and heterogeneity

Article Abstract:

An analysis of the use of representative decision maker restrictions in the common ratio effect data for making observed risky choices reveals that they are poor measures for use in decision-making processes. The study also reveals that constant error for use in aggregate data and stochastic transitivity for use in individual data are better measures for application in decision-making processes.

Economics, Research and Development in the Social Sciences and Humanities, Risk (Economics)

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