Ambiguity and social interaction

Jürgen Eichberger, David Kelsey and Burkhard C. Schipper

We present a non-technical account of ambiguity in strategic games and show how it may be applied to economics and social sciences. Optimistic and pessimistic responses to ambiguity are formally modelled. We show that pessimism has the effect of increasing (decreasing) equilibrium prices under Cournot (Bertrand) competition. In addition the effects of ambiguity on peace-making are examined. It is shown that ambiguity may select equilibria in coordination games with multiple equilibria. Some comparative statics results are derived for the impact of ambiguity in games with strategic complements.

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Year of publication:	May 2007
Authors:	Eichberger, Jürgen ; Kelsey, David ; Schipper, Burkhard
Publisher:	Heidelberg : University of Heidelberg, Department of Economics
Subject:	Ambiguity \| Optimism \| Pessimism \| Strategic Games \| Oligopoly \| Strategic Delegation \| Peace-making \| Strategic Complements \| Choquet Expected Utility \| Erwartungsnutzen \| Expected utility \| Oligopol \| Friedenssicherung \| Peacekeeping \| Theorie \| Theory \| Entscheidung unter Unsicherheit \| Decision under uncertainty \| Soziale Beziehungen \| Social relations \| Nichtkooperatives Spiel \| Noncooperative game

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Extent:	1 Online-Ressource (circa 36 Seiten) Illustrationen
Series:	Discussion paper series / University of Heidelberg, Department of Economics. - Heidelberg : [Verlag nicht ermittelbar], ZDB-ID 2217357-2. - Vol. no. 443
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Systemvoraussetzungen: Acrobat Reader
Other identifiers:	hdl:10419/127265 [Handle]
Classification:	C72 - Noncooperative Games ; D43 - Oligopoly and Other Forms of Market Imperfection ; D62 - Externalities ; D81 - Criteria for Decision-Making under Risk and Uncertainty
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10003592769