Optimism and pessimism in games

• Autores: Jürgen Eichberger, David Kelsey
• Localización: International economic review, ISSN-e 1468-2354, Vol. 55, Nº. 2, 2014, págs. 483-505
• Idioma: inglés
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• Resumen

  • This article considers the impact of ambiguity in strategic situations. It extends the existing literature on games with ambiguity-averse players by allowing for optimistic responses to ambiguity. We use the CEU model of ambiguity with a class of capacities introduced by Jaffrray and Philippe (Mathematics of Operations Research 22 (1997), 165�85), which allows us to distinguish ambiguity from ambiguity-attitude, and propose a new solution concept, equilibrium under ambiguity (EUA), for players who may be characterized by ambiguity-preference. Applying EUA, we study comparative statics of changes in ambiguity-attitude in games with strategic complements. This extends work in Eichberger and Kelsey (Journal of Economic Theory 106 (2002), 436�66) on the effects of increasing ambiguity if players are ambiguity averse.