Optimism and Pessimism in Games

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.

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Year of publication:	2009
Authors:	Eichberger, Jurgen ; Kelsey, David
Institutions:	Business School, University of Exeter
Subject:	Ambiguity in games \| support \| strategic complementarity \| optimism \| multiple equilibria

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Extent:	application/pdf
Series:	Discussion Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 0905
Classification:	C72 - Noncooperative Games ; D81 - Criteria for Decision-Making under Risk and Uncertainty
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008852500