OPTIMISM AND PESSIMISM IN GAMES

B-Tier
Journal: International Economic Review
Year: 2014
Volume: 55
Issue: 2
Pages: 483-505

Authors (2)

Jürgen Eichberger (not in RePEc) David Kelsey (University of Nottingham)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

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.

Technical Details

RePEc Handle
repec:wly:iecrev:v:55:y:2014:i:2:p:483-505
Journal Field
General
Author Count
2
Added to Database
2026-01-25