Arbeitspapier

Ambiguity and Social Interaction

We examine the impact of ambiguity on economic behaviour. We present a relatively non-technical account of ambiguity and show how it may be applied in economics. 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. We also examine the effects of ambiguity on peace processes. It is shown that ambiguity can act to select equilibria in coordination games with multiple equilibria. Some comparative statics results are derived for the impact of ambiguity in games with strategic complements.

Language: Englisch

Bibliographic citation: Series: Bonn Econ Discussion Papers ; No. 23/2003

Classification: Wirtschaft
Criteria for Decision-Making under Risk and Uncertainty
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Noncooperative Games
Externalities

Subject: Ambiguity
Optimism
Oligopoly
Peace processes
Choquet expected utility
Entscheidung bei Unsicherheit
Soziale Beziehungen
Nichtkooperatives Spiel
Erwartungsnutzen
Oligopol
Friedenssicherung
Theorie

Event: Geistige Schöpfung

(who): Eichberger, Jürgen
Kelsey, David H.
Schipper, Burkhard C.

Event: Veröffentlichung

(who): University of Bonn, Bonn Graduate School of Economics (BGSE)

(where): Bonn

(when): 2003

Handle: http://hdl.handle.net/10419/22871

Last update: 10.03.2025, 11:42 AM CET

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Object type

Arbeitspapier

Associated

Eichberger, Jürgen
Kelsey, David H.
Schipper, Burkhard C.
University of Bonn, Bonn Graduate School of Economics (BGSE)

Time of origin

2003

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Arbeitspapier