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Stephanie Rosenkranz (Utrecht) . Economics Colloquia.

Event details of Structure versus risk: An experimental investigation of the determinants of investment decisions in networks
Date 20 April 2006
Time 12:15 -13:15
Location Roeterseilandcampus - building E

Stephanie Rosenkranz (Utrecht)

Structure versus risk: An experimental investigation of the determinants of investment decisions in networks

Abstract

This paper explores the e.ects of network positions as well as individual risk attitudes on individuals’ strategic decisions in an experiment when actions are strategic substitutes. The game theoretic basis for our experiment is the model of Bramoullé and Kranton (2005). In the laboratory we observe subjects’ strategic investment decisions in five simple network structures. We find that the likelihood to specialize or to free ride is significantly higher in asymmetric structures. More strikingly, we find that behavior is also related to risk aversion and experience seekingness, but that the influence is strongly a.ected by network parameters. Coordination fails in the dynamic setting and we do not observe any convergence of behavior towards a theoretically predicted equilibrium.

Economics Colloquia.

Information:

Aljaz Ule: A.Ule@uva.nl
Mikhail Anufriev: M.Anufriev@uva.nl
Franc Klaassen: F. Klaassen@uva.nl

Roeterseilandcampus - building E

Roetersstraat 11
1018 WB Amsterdam

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