Accounting for risk aversion in repeated prisoners’ dilemma games: an experimental test

Sabater-Grande, G. and Georgantzis, N. (2002) Accounting for risk aversion in repeated prisoners’ dilemma games: an experimental test. Journal of Economic Behavior & Organization, 48 (1). pp. 37-50. ISSN 01672681 doi: 10.1016/S0167-2681(01)00223-2

Abstract/Summary

We apply experimental methods to study the role of risk aversion on players’ behavior in repeated prisoners’ dilemma games. Faced with quantitatively equal discount factors, the most risk-averse players will choose Nash strategies more often in the presence of uncertainty than when future profits are discounted in a deterministic way. Overall, we find that risk aversion relates negatively with the frequency of collusive outcomes.