Choices in the 11–20 Game: The Role of Risk Aversion

King King Li and Kang Rong
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King King Li: College of Business, Department of Economics and Finance, and CityU HK Experimental Economics Lab, City University of Hong Kong, Tat Chee Avenue, Hong Kong, China
Kang Rong: School of Economics, Shanghai University of Finance and Economics, 777 Guoding Road, Shanghai 200433, China

Games, 2018, vol. 9, issue 3, 1-14

Abstract: Arad and Rubinstein (2012, AER) 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.

Keywords: rationality; measuring depth of thinking; risk aversion; experiment (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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