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We provide an evolutionary foundation to evidence that in some situations humans maintain either optimistic or pessimistic attitudes towards uncertainty and are ignorant to relevant aspects of the environment. Players in strategic games face Knightian uncertainty about opponents' actions and...
Persistent link: https://www.econbiz.de/10012101422
to dynamically consistent behavior. Furthermore, we give an example which shows that ambiguity can introduce new …
Persistent link: https://www.econbiz.de/10011892219
We provide an axiomatic approach to a belief formation process in an informational environment characterized by limited, heterogenous and differently precise information. For a list of previously observed cases an agent needs to express her belief by assigning probabilities to possible outcomes....
Persistent link: https://www.econbiz.de/10010356678
Aim: Develop a methodological approach to reduce uncertainty of knowledge necessary for decision making in quick … recognized as a good paradigm in Kuhn’s sense suitable to build certain knowledge in the uncertain surroundings. So, it is the … for decision making processes based on uncertain information and knowledge. In this paper a methodology of introduction …
Persistent link: https://www.econbiz.de/10013198731
desired coordination of actions even when a high order of mutual knowledge of payoff functions obtains. We want to make … explicit the role of knowledge about rationality of players, not only that of payoff functions. For this purpose, we use an … embedding belief systems, it is necessary that the upper bound order of mutual knowledge of payoff functions exceeds the upper …
Persistent link: https://www.econbiz.de/10003321328
We provide a tool to model and solve strategic situations where players' perceptions are limited, in the sense that they may only be aware of, or model, some of the aspects of the strategic situations at hand, as well as situations where players realize that other players' perceptions may be...
Persistent link: https://www.econbiz.de/10013098246
Informed by Grether and Plott (1979) and Cox and Grether (1996), we implement various preference elicitation procedures over a parameter grid. First, we find a lower incidence of preference reversals for probability equivalents from the dual-to-selling version of Becker, Degroot, and Marschak (1964;...
Persistent link: https://www.econbiz.de/10011757769
Two agents are engaged in a joint activity that yields a common perperiod payoff at two rounds of play. The expert announces the probability that the current state of the world is low, instead of high, at each stage. Having received the report of the expert, the decision-maker takes action at...
Persistent link: https://www.econbiz.de/10008747722
Persistent link: https://www.econbiz.de/10009765840
In an information cascade experiment participants are confronted with artificial predecessors predicting in line with the BHW model (Bikchandani et al. 1992). Using the BDM (Becker et al., 1964) mechanism we study participants' probability perceptions based on maximum prices for participating in...
Persistent link: https://www.econbiz.de/10003402312