“Parco, Rapoport and Stein (2002) illustrated that the level of financial incentives can have a profound effect on the outcome in a three-player game: the larger the incentives are for deviation, the greater propensity for learning behavior in a repeated single-play experimental design to move toward the Nash equilibrium.”
I recall reading somewhere that people also behave more rationally in other games like the Dictator Game (and exhibit fewer cognitive biases) when the stakes are higher, but can’t remember where.
Re:People Aren’t Dumb, the World Is Hard
by dEnigma on Thursday July 12, 2018 @02:17PM
(#17517211)
The Nash equilibrium in this case being immediately taking the larger stash, instead of waiting (or even cooperating) with the other player for much higher payouts.
“Parco, Rapoport and Stein (2002) illustrated that the level of financial incentives can have a profound effect on the outcome in a three-player game: the larger the incentives are for deviation, the greater propensity for learning behavior in a repeated single-play experimental design to move toward the Nash equilibrium.”
I recall reading somewhere that people also behave more rationally in other games like the Dictator Game (and exhibit fewer cognitive biases) when the stakes are higher, but can’t remember where.