Wulf Albers

Bounded Rational Behavior in Experimental Games and Markets

I. Experimental Economics.- Experimental Economics: Ways to Model Bounded Rational Bargaining Behavior - Introductory Remarks to the Fourth Conference on Experimental Economics.- Experimental Economics: A Psychological Perspective.- II. Unilateral Decisions.- Normative and Individual Strategies in Social Dilemmata.- Learning to Make Good Predictions in Time Series.- A Preliminary Analysis of a Large-Scale Experimental Investigation into Consumption under Uncertainty.- Mental Representation in Multistage Decision Making.- III. Bilateral Decisions.- Stability and Outcome Tradeoffs in Asymmetric Dilemmas: Conditions Promoting the Discovery of Alternating Solutions.- The Influence of Social Orientation and Generalized Expectancies on Decision Making in Iterated Experimental Games.- Ultimatum Bargaining for a Shrinking Cake - An Experimental Analysis.- Bounded Rational Strategies in Sequential Bargaining: An Experiment and a Learning by Evolution Strategy.- Semi-Normative Properties of Bounded Rational Bargaining Theories.- Modeling Mediator Behavior in Experimental Games.- IV. Auctions and Markets.- Dual Ceteris Paribus Comparisons: Some Initial Thoughts on Laboratory Isolation of Equilibrium Forces in Auction Markets.- Learning in Common Value Auctions.- Inflation and Expectations in Experimental Markets.- Modeling Investment Behavior in an Experimental Market.- V. Coalition Formation.- Order of Strength and Exhaustivity as Additional Hypotheses in Theories for 3-Person Characteristic Function Games.- The Effects of Justice Norms in a Bargaining Situation.- Modeling Coalition Formation in Inessential Probabilistic Games.- Sequential Games of Status: A Replication.- Equal Share Analysis for Location Games.- Limits of Rational Behavior in Cooperatively Played Normal Form Games.- Revealed Aspirations and Reciprocal Loyalty in Apex Games.- VI. Bibliography.- Selected Bibliography of the Participants Contributions to Experimental Economics.- Author Index.

On the Prominence Structure of the Decimal System

Publisher Summary This chapter discusses a theory of the prominence of numbers of the decimal system. Basic components of the theory are the limited rational principles of rule construction by iterated addition or subtraction of a given amount and the refinement of a scale by adding the means of any two neighbors and its coarsening by omitting all uneven elements. Applying these principles to the powers of 10, various scales with different degrees of exactness can be constructed. Empirical observations suggest that among different scales with about the same exactness generally the one that can be constructed in an easier way is chosen. Empirical results indicate that the prominence of the set of numbers resulting from a specific decision situation is in many cases about one tenth of the numbers in question. The prominence of a specific decision problem seems to be selected according to the rule that it is maximal subject to the condition that the range of reasonable alternatives contains at least three prominent numbers.

Experimental Evidence for Attractions to Chance

Abstract Divide the decision-makers future into: (i) a pre-outcome period (lasting from the decision until the outcome of that decision is known), and (ii) a sequel postoutcome period (beginning when the outcome becomes known). Anticipated emotions in both periods may influence the decision, in particular, with regard to an outcome that matters to the person, the enjoyable tension from not yet knowing what this outcome will be. In the experiments presented, lottery choice can be explained by this attraction to chance, and cannot be explained by either convex von Neumann-Morgenstern utility, or by rank-dependent risk-loving weights: attraction to chance is a separate motivator.

Two-Person Bargaining Between Threat and Fair Solution

The paper gives a model of bargaining involving threats. Two types of solution concepts are introduced, one models bargaining in conflict situations, the other models fair solutions.