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by throwaway37585 2897 days ago
I don’t think the claim is exceptional, but I’d love to see more studies on this. Check out the Centipede Game (https://en.m.wikipedia.org/wiki/Centipede_game):

“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.

2 comments

What would the game’s results be if the financial incentives were unknown and/or highly variable? That’s more like real life.
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.