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: Bonn Econ Discussion Papers ; No. 35/2005

Classification and Topics

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

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Schipper, Burkhard C.
• Event: Veröffentlichung
• (who): University of Bonn, Bonn Graduate School of Economics (BGSE)
• (where): Bonn
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/22941
• Last update: 10.03.2025, 11:43 AM CET