Arbeitspapier

The Evolutionary Stability of Optimism, Pessimism and Complete Ignorance

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.

Language
Englisch

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

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

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

DOI
doi:10.5282/ubm/epub.13482
Handle
URN
urn:nbn:de:bvb:19-epub-13482-6
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Schipper, Burkhard C.
  • Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)

Time of origin

  • 2005

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