Ambiguity and Social Interaction

Arbeitspapier

We present a non-technical account of ambiguity in strategic games and show how it may be applied to economics and social sciences. Optimistic and pessimistic responses to ambiguity are formally modelled. We show that pessimism has the effect of increasing (decreasing) equilibrium prices under Cournot (Bertrand) competition. In addition the effects of ambiguity on peace-making are examined. It is shown that ambiguity may select equilibria in coordination games with multiple equilibria. Some comparative statics results are derived for the impact of ambiguity in games with strategic complements.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper Series ; No. 443

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Externalities ; Criteria for Decision-Making under Risk and Uncertainty
• Subject: Ambiguity ; Optimism ; Pessimism ; Strategic Games ; Oligopoly ; Strategic Delegation ; Peace-making ; Strategic Complements ; Choquet Expected Utility ; Erwartungsnutzen ; Oligopol ; Friedenssicherung ; Theorie ; Entscheidung unter Unsicherheit ; Soziale Beziehungen ; Nichtkooperatives Spiel

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Eichberger, Jürgen ; Kelsey, David ; Schipper, Burkhard C.
• Event: Veröffentlichung
• (who): University of Heidelberg, Department of Economics
• (where): Heidelberg
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/127265
• Last update: 10.03.2025, 11:43 AM CET