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Optimism and pessimism in games

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This paper considers the impact of ambiguity in strategic situations. It extends the earlier literature by allowing for optimistic responses to ambiguity. Ambiguity is modelled by CEU preferences. We propose a new solution concept for players who may express ambiguity-preference. Then we study compa...

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Bibliographic Details
Main Authors: Eichberger, Jürgen (Author) , Kelsey, David (Author)
Format: Book/Monograph Working Paper
Language:English
Published: Exeter Univ. of Exeter, School of Business and Economics 2009
Series:Discussion papers in economics / University of Exeter, School of Business and Economics 09/05
In: Department of Economics discussion papers (09/05)

Subjects:
Arbeitspapier
Graue Literatur
Online Access:Verlag, Volltext: http://business-school.exeter.ac.uk/economics/papers/2009/Econ_0905.pdf
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Author Notes:Jürgen Eichberger and David Kelsey
Description
Summary:This paper considers the impact of ambiguity in strategic situations. It extends the earlier literature by allowing for optimistic responses to ambiguity. Ambiguity is modelled by CEU preferences. We propose a new solution concept for players who may express ambiguity-preference. Then we study comparative statics of changes in ambiguity-attitude in games with strategic complements. This gives a precise statement of the impact of ambiguity on economic behaviour.
Physical Description:Online Resource
Format:Systemvoraussetzungen: Acrobat Reader.

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