Optimism and pessimism in games
This article considers the impact of ambiguity in strategic situations. It extends the existing literature on games with ambiguity-averse players by allowing for optimistic responses to ambiguity. We use the CEU model of ambiguity with a class of capacities introduced by Jaffrray and Philippe (Mathe...
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| Main Authors: | , |
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| Format: | Article (Journal) |
| Language: | English |
| Published: |
22 April 2014
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| In: |
International economic review
Year: 2014, Volume: 55, Issue: 2, Pages: 483-505 |
| ISSN: | 1468-2354 |
| DOI: | 10.1111/iere.12058 |
| Online Access: | Verlag, lizenzpflichtig, Volltext: https://doi.org/10.1111/iere.12058 Verlag, lizenzpflichtig, Volltext: https://onlinelibrary.wiley.com/doi/abs/10.1111/iere.12058 
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| Author Notes: | by Jürgen Eichberger and David Kelsey |
| Summary: | This article considers the impact of ambiguity in strategic situations. It extends the existing literature on games with ambiguity-averse players by allowing for optimistic responses to ambiguity. We use the CEU model of ambiguity with a class of capacities introduced by Jaffrray and Philippe (Mathematics of Operations Research 22 (1997), 165-85), which allows us to distinguish ambiguity from ambiguity-attitude, and propose a new solution concept, equilibrium under ambiguity (EUA), for players who may be characterized by ambiguity-preference. Applying EUA, we study comparative statics of changes in ambiguity-attitude in games with strategic complements. This extends work in Eichberger and Kelsey (Journal of Economic Theory 106 (2002), 436-66) on the effects of increasing ambiguity if players are ambiguity averse. |
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| Item Description: | Gesehen am 16.09.2020 |
| Physical Description: | Online Resource |
| ISSN: | 1468-2354 |
| DOI: | 10.1111/iere.12058 |