The effect of loss aversion on congestion games
نویسنده
چکیده
Expected utility maximization is not a good predictive model of how people value outcomes. One of the ways in which people systematically deviate from expected utility maximization is loss aversion, where losses (relative to some reference point) are more highly weighted than gains. I investigate whether and how the theoretical guarantees of congestion games change when the agents are assumed to be loss averse. I also introduce and investigate the effects of assuming loss averse agents on a stochastic version of congestion games.
منابع مشابه
Risk premiums and certainty equivalents of loss-averse newsvendors of bounded utility
Loss-averse behavior makes the newsvendors avoid the losses more than seeking the probable gains as the losses have more psychological impact on the newsvendor than the gains. In economics and decision theory, the classical newsvendor models treat losses and gains equally likely, by disregarding the expected utility when the newsvendor is loss-averse. Moreover, the use of unbounded utility to m...
متن کاملSign Effect, Speedup – Delay Asymmetry and Gender Effect In the Tehran Stock Exchange
The present study first investigates the asymmetry of speedup - delay (gain and loss) and Sign Effect in Tehran Stock Exchange, then examine the effect of gender on the discount rate and explain it with the loss aversion. The sample is 403 investors in Tehran Stock Exchange, and the nonparametric Tests are used to test the research hypotheses. The research results show that there is an asymmetr...
متن کاملPath Deviations Outperform Approximate Stability in Heterogeneous Congestion Games
We consider non-atomic network congestion games with heterogeneous players where the latencies of the paths are subject to some bounded deviations. This model encompasses several well-studied extensions of the classical Wardrop model which incorporate, for example, risk-aversion, altruism or travel time delays. Our main goal is to analyze the worst-case deterioration in social cost of a deviate...
متن کاملThe effect of subtracting a constant from all payoffs in a hawk–dove game: experimental evidence of loss aversion in strategic behavior
Economists and psychologists have documented patterns of individual decision–making behavior (e.g., loss aversion) whereby losses and gains are treated differently. However, there has been little evidence of such patterns in multi–player games. We report results showing the strongest evidence we know of that this phenomenon is present in games. Experimental subjects play two hawk–dove games tha...
متن کاملOn Loss Aversion in Bimatrix Games
In this article three different types of loss aversion equilibria in bimatrix games are studied. Loss aversion equilibria are Nash equilibria of games where players are loss averse and where the reference points—points below which they consider payoffs to be losses— are endogenous to the equilibrium calculation. The first type is the fixed point loss aversion equilibrium, introduced in Shalev (...
متن کامل