This paper investigates the conditions for which spreading N independent and unfair risks provides the highest level of welfare than any other possible allocations of risks. It shows that such preferences do not require a higher order property than temperance. Results are also interpreted in terms of the property of superadditivity of the utility premium.

Most laboratory experiments studying Tullock contest games find that bids significantly exceed the risk-neutral equilibrium predictions. We test the generalisability of these results by comparing a typical experimental implementation of a contest against the familiar institution of a ticket-based raffle. We find that in the raffle (1) initial bid levels are significantly lower and (2) bids adjust more rapidly towards expected-earnings best responses. We demonstrate the robustness of our results by replicating them across two continents at two university labs with contrasting student profiles.

Under approval voting (AV), each voter just distinguishes the candidates he approves of from those appearing as unacceptable. The preference approval voting (PAV) is a hybrid version of the approval voting first introduced by Brams and Sanver (in: Brams, Gehrlein, Roberts (eds) The mathematics of preference, choice and order. Springer, Berlin, pp 215–237, 2009). Under PAV, each voter ranks all the candidates and then indicates the ones he approves. In this paper, we provide an analytical representation of the limiting probability that PAV elects the Condorcet winner (resp. the Condorcet loser) when she exists in three-candidate elections. We perform our analysis by assuming the assumption of the Extended Impartial Culture. The aim is to measure at which extend PAV performs better than AV both on the propensity of electing the Condorcet winner and on that of the non-election of the Condorcet loser. For this purpose, we also provide an analytical representation of the limiting probability that AV elects the Condorcet winner (resp. the Condorcet loser) when she exists in three-candidate elections. Our representation of the limiting probability that AV elects the Condorcet winner is more general than that provided by Diss et al. (in: Laslier and Sanver (eds) Handbook on approval voting. Springer, Berlin, pp 255–283, 2010) and it leads to the same figures as the representation provided by Gehrlein and Lepelley (Group Decis Negot 24:243–269, 2015).

The hukou system is a mandatory household registration system in China that assigns an individual either an urban/non-agricultural hukou or a rural/agricultural hukou based on one’s birthplace. This system favors urban residents and discriminates against rural residents in accessing state-owned resources such as employment, education, health care, and housing. To better understand how this institutionally imposed hukou identity impacts an individual’s sense of fairness in the ultimatum game, we conducted a field experiment in China using 9–12-year-old children and collected 672 observations. Subjects played a one-shot ultimatum game to allocate 20 yuan in groups of two. We employed a 2 (hukou salience) $$\times $$ 2 (proposer’s hukou type) $$\times $$ 2 (responder’s hukou type) experiment design and used the strategic method ultimatum game. We primed our subjects with their hukou identity before they made their decisions in the experiment. Results of this study show that hukou salience mainly affects rural hukou subjects, who belong to the perceived less-favored social group. On one hand, when the hukou identity is made salient, rural hukou proposers decrease their amount offered regardless of their responder’s hukou type. On the other hand, rural hukou responders expect higher offers from their urban hukou proposers when the hukou identity is revealed. We interpret these results as that rural hukou subjects tend to seek compensations for their perceived hukou inferiority to achieve fair distributions.

One approach to achieving cooperation in the one-shot prisoner’s dilemma is Tennenholtz’s (Games Econ Behav 49(2):363–373, 2004) program equilibrium, in which the players of a game submit programs instead of strategies. These programs are then allowed to read each other’s source code to decide which action to take. As shown by Tennenholtz, cooperation is played in an equilibrium of this alternative game. In particular, he proposes that the two players submit the same version of the following program: cooperate if the opponent is an exact copy of this program and defect otherwise. Neither of the two players can benefit from submitting a different program. Unfortunately, this equilibrium is fragile and unlikely to be realized in practice. We thus propose a new, simple program to achieve more robust cooperative program equilibria: cooperate with some small probability epsilon and otherwise act as the opponent acts against this program. I argue that this program is similar to the tit for tat strategy for the iterated prisoner’s dilemma. Both “start” by cooperating and copy their opponent’s behavior from “the last round”. We then generalize this approach of turning strategies for the repeated version of a game into programs for the one-shot version of a game to other two-player games. We prove that the resulting programs inherit properties of the underlying strategy. This enables them to robustly and effectively elicit the same responses as the underlying strategy for the repeated game.

We consider a two-player contest in which one contestant has a headstart advantage, but both can exert further effort. We allow the prize to depend on total performance in the contest and consider the respective cases in which efforts are productive and destructive of prize value. When the contest success function takes a logit form, and marginal cost is increasing in effort, we show that a Nash equilibrium exists and is unique both in productive and destructive endogenous prize contests. In equilibrium, the underdog expends more resources to win the prize, but still his probability of winning remains below that of the favorite. In a productive contest, the underdog behaves more aggressively and wins the prize more often in comparison to a fixed-value contest. Thus, the degree of competitive balance—defined as the level of uncertainty of the outcome—depends upon the (fixed or endogenous) prize nature of the contest.

In this paper, ambiguity aversion to uncertain survival probabilities is
\nintroduced in a life-cycle model with a bequest motive to study the optimal demand
\nfor annuities. Provided that annuities return is sufficiently large, and notably when
\nit is fair, positive annuitization is known to be the optimal strategy of ambiguity
\nneutral individuals. Conversely, we show that the demand for annuities decreases with
\nambiguity aversion and that there exists a finite degree of aversion above which the
\ndemand is non positive: the optimal strategy is then to either sell annuities short or
\nto hold zero annuities if the former option is not available. To conclude, ambiguity
\naversion appears as a relevant candidate for explaining the annuity puzzle.

We analyze the results from three different risk attitude elicitation methods. First, the broadly used test by Holt and Laury (2002), HL, second, the lottery-panel task by Sabater-Grande and Georgantzis (2002), SG, and third, responses to a survey question on self-assessment of general attitude towards risk (Dohmen et al. 2011). The first and the second task are implemented with real monetary incentives, while the third concerns all domains in life in general. Like in previous studies, the correlation of decisions across tasks is low and usually statistically non-significant. However, when we consider only subjects whose behavior across the panels of the SG task is compatible with constant relative risk aversion (CRRA), the correlation between HL and self-assessed risk attitude becomes significant. Furthermore, the correlation between HL and SG also increases for CRRA-compatible subjects, although it remains statistically non-significant.

This paper analyses the principles of stable cooperation for stochastic games. Starting from the non-cooperative version of a discounted, non zero-sum stochastic game, we build its cooperative form and find the cooperative solution. We then analyse the conditions under which this solution is stable. Principles of stability include subgame consistency, strategic stability and irrational behaviour proof of the cooperative solution. We finally discuss the existence of a stable cooperative solution, and consider a type of stochastic games for which the cooperative solution is found and the principles of stable cooperation are checked.

We design a double-or-quits game to compare the speed of learning one’s specific ability with the speed of rising confidence as the task gets increasingly difficult. We find that people on average learn to be overconfident faster than they learn their true ability and we present an intuitive-Bayesian model of confidence which integrates confidence biases and learning. Uncertainty about one’s true ability to perform a task in isolation can be responsible for large and stable confidence biases, namely limited discrimination, the hard–easy effect, the Dunning–Kruger effect, conservative learning from experience and the overprecision phenomenon (without underprecision) if subjects act as Bayesian learners who rely only on sequentially perceived performance cues and contrarian illusory signals induced by doubt. Moreover, these biases are likely to persist since the Bayesian aggregation of past information consolidates the accumulation of errors and the perception of contrarian illusory signals generates conservatism and under-reaction to events. Taken together, these two features may explain why intuitive Bayesians make systematically wrong predictions of their own performance.