This paper proposes that the ambiguity reflected by a set of priors remains unchanged when the set is translated within the probability simplex, i.e. ambiguity is location invariant. This unifies and generalises numerous influential definitions of ambiguity in the literature. Location invariance...

Chasing and the house money effect are well-known phenomena in dynamic environments of risky activities such as investment decisions or gambling. Recent studies suggest that such behavior emerges from dynamic inconsistency and leads to substantial welfare consequences that can extend beyond...

This paper proposes two models in which price stickiness arises endogenously even though firms are free to change their prices at zero physical cost. Firms are subject to idiosyncratic and aggregate shocks, and they also face a risk of making errors when they set their prices. In our first...

This paper focuses both on the competition process and the firms liability in environmental protection and the demonstration is made by comparing two models of safety investment. The rst one shows sensitive players to their environmental liability: they seek to minimize the technologies accident...

Trust is an important driver of economic transactions, but how do people decide whom to trust? We conduct an experiment to investigate whether people are able to predict trustworthiness by judging the face of a stranger. The behavior of the second player in the Trust Game is used as a measure of...

This paper studies investments in new markets where more than two (anticipated) identical competitors are present. In case of three firms an accordion effect is detected: an exogenous demand shock results in a change of the wedge between investment thresholds of the first and second investor...

In a global game, larger ambiguity is shown to decrease the amount of coordination each player perceives. Consequently, small uncertainty tends to select the Pareto dominated equilibrium of the game without uncertainty. Implications for models of financial crises are drawn.

In an experiment using two-bidder first-price sealed bid auctions with symmetric independent private values and 400 participants, we collected information on the female participants' menstrual cycles and the use of hormonal contraceptives. We find that naturally cycling women bid significantly...

In contrast to current literature which mainly identifies relationships between particular economic behaviours and specific attitudes suggestive of those behaviours, we explore the potential of general human values for explaining economic behaviour. In particular, we investigate whether...

In the rational choice problem Zutler (2011) proposed a model of choice by continuous Markov random walk on a set of alternatives to find the best. In this paper we investigate the optimal properties of obtained solutions. It is shown that the result of this choice is the maximal element on a...