Gambling in a Malthusian Universe

Gregory B. Pollock and Keith A. Lewis
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Gregory B. Pollock: Northwestern University and Arizona State University
Keith A. Lewis: Metropolitan Life

Rationality and Society, 1993, vol. 5, issue 1, 85-106

Abstract: Prospect choice is generally viewed as a game against nature. This article models prospect choice as an n- person game where each subject assumes that n- 1 others will be exposed to the same decision problem (prospect choice set) as self; the goal is not to “beat nature†but to do relatively better than rivals exposed to the same problem. Preference becomes strategy choice in n- person Nash equilibrium. When symmetric pure strategy equilibria do not exist, choice is a symmetric randomized equilibrium; here, uncertainty (probabilistic response) becomes a method of dealing with uncertainty in nature. The approach produces, qualitatively, several empirical expected utility paradoxes (the certainty effect, intransitive cycles, and one form of reflection), and an evolutionary game-theoretic extension accounts for all the phenomena revealed by the research of Kahneman and Tversky.

Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ratsoc:v:5:y:1993:i:1:p:85-106

DOI: 10.1177/1043463193005001008

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