GAMES USED IN BEHAVIORAL FINANCE RESEARCH: A COMPARISON OF DICTATOR, ULTIMATO, AND TRUST GAME

Abstract

Purpose- The main subject of behavioral finance, which emerged with the deterioration of the rationality assumption of traditional finance theories, the fact that people are not creatures who will do everything to maximize their own benefits and think of nothing but utilitarianism, and that win-win playing can have a positive effect on the total return, is investor behavior. Because it will not be possible to understand the market without understanding the investor. For this reason, it is extremely important for researchers to know the behavior patterns of the investor and, more importantly, to identify the reasons for these behaviors. This study has been prepared in order to guide and assist researchers who are doing or considering doing research in this field. Methodology- Literature review was conducted in the study. Scientifically defined dictator game, ultimatum game and trust game are explained in detail. Findings- Literature examples of games that are easy to implement in experimental designs used in the evaluation of the causes and consequences of financial decisions are considered as findings. Conclusion- The aim of the study is to explain various behavioral games that are relatively easy and highly applicable to scientists who study investor behavior in the research area of behavioral finance. Behavioral games that started with game theory continued with dictator, ultimatum and trust games. Current studies show that the number and quality of these games still continues. Since the examination of investor behavior is extremely important due to its ability to reduce individual losses and to minimize market anomalies, this study is expected to guide future studies. Keywords: Behavioral finance, dictator game, ultimatum game, trust game, investor behavior JEL Codes: D90, G40, H30