Gamers Earn Higher Payoffs by Embracing Uncertainty and Risk Premiums
The study looked at how uncertainty in game payoffs changes over time and affects players' decisions. By using a Weibull distribution in a simulation-based game, researchers found that players tend to choose the best strategy but still aim for higher expected payoffs with a risk premium. They discovered that as the game progresses from early to late stages, the average and variance of payoffs decrease. Additionally, the scale of payoffs influences the average and variance of Nash equilibrium payoffs, with higher scales leading to greater variability. To maximize their earnings, players should consider both the changing uncertainty over time and the scale of payoffs.