The Evolutionary Stability of Optimism, Pessimism and Complete Ignorance

Arbeitspapier

We provide an evolutionary foundation to evidence that in some situations humans maintain 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 maximize individually their Choquet expected utility. Our Choquet expected utility model allows for both an optimistic or pessimistic attitude towards uncertainty as well as ignorance to strategic dependencies. An optimist (resp. pessimist) overweights good (resp. bad) outcomes. A complete ignorant never reacts to opponents' change of actions. With qualifications we show that optimistic (resp. pessimistic) complete ignorance is evolutionary stable / yields a strategic advantage in submodular (resp. supermodular) games with aggregate externalities. Moreover, this evolutionary stable preference leads to Walrasian behavior in those classes of games.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB/TR 15 Discussion Paper ; No. 68

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games ; Microeconomic Behavior: Underlying Principles ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Criteria for Decision-Making under Risk and Uncertainty ; Oligopoly and Other Imperfect Markets
• Subject: ambiguity ; Knightian uncertainty ; Choquet expected utility ; neo-additive capacity ; Hurwicz criterion ; Maximin ; Minimax ; Ellsberg paradox ; overconfidence ; supermodularity ; aggregative games ; monotone comparative statics ; playing the field ; evolution of preferences

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Schipper, Burkhard C.
• Event: Veröffentlichung
• (who): Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
• (where): München
• (when): 2005

Further information

• DOI: doi:10.5282/ubm/epub.13482
• Handle: http://hdl.handle.net/10419/93786
• URN: urn:nbn:de:bvb:19-epub-13482-6
• Last update: 10.03.2025, 11:42 AM CET