1. The Stag Hunt Game

2. Introduction The stag hunt, first proposed by Rousseau, is a game which describes a conflict between safety and social cooperation. The concept goes something like this: Two hunters go out for the day looking for some prey. There are three possible targets...a large stag and a couple of hares. The only way to get a stag is for both hunters to work together. However if one goes for the stag and the other goes for a hare; he’ll end up with nothing. If you’re hunting for hares by yourself, you will get two for sure. If both hunters go for hares, each will get one; and therefore will have dinner regardless of what the other has chosen. Therefore although hunting a hare produces less meat, it is potentially advantageous because it is really easy.

3. Assumptions of the Model There is no communication between the two hunters. The Stag yields more food than the Hare. In any given scenario, at least one hunter is guaranteed food. Both hunters are rational and equally informed. The numbers on the matrices represent the utiles gained from payoffs. There is no communication between the two hunters. The Stag yields more food than the Hare. In any given scenario, at least one hunter is guaranteed food. Both hunters are rational and equally informed. The numbers on the matrices represent the utiles gained from payoffs.

4. Risk Dominant and Pay-off Dominant Equilibrium 80,8010,50 50,1050,50 Hunter 1 A game is said to be in Nash equilibrium when no player has incentive to change their strategy given the strategies of all other players that are playing. Pay-off Dominant equilibrium = Stag, Stag strategy pair Risk-Dominant equilibrium= Hare, Hare. Strategy pair The Strategy pair Stag, Stag gives a higher pay off than Hare, Hare. However the strategy pair Hare, Hare provides less risk due to uncertainty of each hunters actions. The strategy pair Hare, Hare provides a higher expected pay-off. Hunter 2 StagHare Stag Hare N.E

5. Main Paper Loss Avoidance as Selection Principle: Evidence from Simple Stag- Hunt Games: Ondřej Rydval, Andreas Ortmann  This paper investigates the conjecture that loss avoidance solves the tension in stag-hunt games for which payoff dominance and risk dominance make conflicting predictions.  We look at affine transformations of the stag hunt game and see how it affects human behavior. The risks don ’ t change in any of the games.  We are primarily concerned with whether potential losses will make people more likely to coordinate (pay-off dominant), contrary to textbook wisdom. Loss Avoidance as Selection Principle: Evidence from Simple Stag- Hunt Games: Ondřej Rydval, Andreas Ortmann  This paper investigates the conjecture that loss avoidance solves the tension in stag-hunt games for which payoff dominance and risk dominance make conflicting predictions.  We look at affine transformations of the stag hunt game and see how it affects human behavior. The risks don ’ t change in any of the games.  We are primarily concerned with whether potential losses will make people more likely to coordinate (pay-off dominant), contrary to textbook wisdom. Game 1 B A Game 2 -60

6. Secondary Papers The Stag Hunt by Brian Skyrms and U. C. Irvine. This paper gives a good overview of the Stag Hunt game along with the introduction of new variables and changes assumptions such as the probability of success of each individual hunt. Optimization Incentives And Coordination Failure In Laboratory Stag Hunt Games by Raymond Battalio, Larry Samuelson, and John Van Huyck. This paper conducts three stag hunt games in which the risk dominant and the payoff dominant solutions conflict. This leads to an inefficient pure strategy outcome. These papers will be used in conjunction with the main paper in our final presentation. The Stag Hunt by Brian Skyrms and U. C. Irvine. This paper gives a good overview of the Stag Hunt game along with the introduction of new variables and changes assumptions such as the probability of success of each individual hunt. Optimization Incentives And Coordination Failure In Laboratory Stag Hunt Games by Raymond Battalio, Larry Samuelson, and John Van Huyck. This paper conducts three stag hunt games in which the risk dominant and the payoff dominant solutions conflict. This leads to an inefficient pure strategy outcome. These papers will be used in conjunction with the main paper in our final presentation.

7. Questions that will be answered: Will loss avoidance change the incentives of the players towards a payoff dominant equilibrium? By changing some of the assumptions, how does this affect the model. How does this model represent certain aspects of the economic world. Will loss avoidance change the incentives of the players towards a payoff dominant equilibrium? By changing some of the assumptions, how does this affect the model. How does this model represent certain aspects of the economic world.

8. Thank you for listening