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 (2000; Int. J. Game Theory 29(2):269) under the name of ‘myopic loss aversion equilibrium.’ There, the players’ reference points depend on the (...) beliefs about their opponents’ strategies. The second type, the maximin loss aversion equilibrium, differs from the fixed point loss aversion equilibrium in that the reference points are only based on the carriers of the strategies, not on the exact probabilities. In the third type, the safety level loss aversion equilibrium, the reference points depend on the values of the own payoff matrices. Finally, a comparative statics analysis is carried out of all three equilibrium concepts in 2 × 2 bimatrix games. It is established when a player benefits from his opponent falsely believing that he is loss averse. (shrink)

Nash equilibria with identical supports are compared for bimatrix games that are different with respect to the risk aversion of player 2. For equilibria in 2× 2-bimatrix games and for equilibria with efficient supports in coordination games it is established for which cases increased risk aversion of player 2 benefits or hurts player 2.

Scientific policy advice is usually perceived as a formalized advisory process within political institutions. Politics has benefited from this arrangement because the science-based rationalization of policy has contributed to its legitimacy. However, in Western democratic societies, scientific expertise that is routinely mobilized to legitimate political positions has increasingly lost its power due to controversial expertise in the public sphere in particular within the mass media. As a consequence of the medialization of science, political decision makers are increasingly confronted with mass-mediated (...) expertise. Empirical results of a qualitative survey among decision makers in the German political and administrative system, presented in this article, support the hypothesis that mass-mediated expertise has a significant impact on policy processes. Five functions of media coverage on science-based issues for policy making were identified. Mass-mediated expertise has therefore altered the established relations between scientific policy advisors and political decision makers and can be seen as informal policy advice complementing institutionalized advisory arrangements. (shrink)

We call a decision maker risk averse for losses if that decision maker is risk averse with respect to lotteries having alternatives below a given reference alternative in their support. A two-person bargaining solution is called invariant under risk aversion for losses if the assigned outcome does not change after correcting for risk aversion for losses with this outcome as pair of reference levels, provided that the disagreement point only changes proportionally. We present an axiomatic characterization of the Nash bargaining (...) solution based on this condition, and we also provide a decision-theoretic characterization of the concept of risk aversion for losses. (shrink)

We consider choice correspondences that assign a subset to every choice set of alternatives, where the total set of alternatives is an arbitrary finite or infinite set. We focus on the relations between several extensions of the condition of independence of irrelevant alternatives on one hand, and conditions on the revealed preference relation on sets, notably the weak axiom of revealed preference, on the other hand. We also establish the connection between the condition of independence of irrelevant alternatives and so-called (...) strong sets; the latter characterize a social choice correspondence satisfying independence of irrelevant alternatives. (shrink)