11:30 - 13:00
Location: G04
Chair/s:
shaun hargreaves heap
Submission 139
Final Countdown? An Experimental Collective Risk Dilemma with Horizon Uncertainty
P1-G04-03
Presented by: Ágnes Pintér
Carmen Arguedas 1, Hubert János Kiss 2Ágnes Pintér 1
1 Universidad Autónoma de Madrid
2 KRTK KTI & Corvinus University of Budapest
In this study, we experimentally analyze the incentives to avoid a collective catastrophe
when subjects face uncertainty about the exact time at which the loss may occur. We investigate
three versions of the Collective Risk Dilemma: (i) a benchmark scenario in which subjects
know the ending period by which they have to complete collective efforts to avoid a sure loss
of a big portion of their remaining assets; (ii) a risky scenario where subjects do not know
the exact ending period but they are at least aware of its probability distribution; and (iii) an
ambiguous scenario where subjects do not know the exact ending period nor the probability
distribution. Both uncertainty treatments result in significantly larger efforts compared to those
found under certainty. However, these additional contributions may not be enough to avoid the
collective disaster.