agents' ability to build a correct shared representation of the competencies of the other agents. We lead two sets of …

-maker's attitude to risk and provide comparative static results. We also assume ambiguity about the probability distribution of the … ambiguity. We show that this value increases with greater ambiguity, with greater ambiguity aversion, and in some cases with … greater risk aversion. Finally we examine whether a more risk-averse and a more ambiguity-averse individual will invest in …

of ambiguity, there exists an equilibrium with inertia where agents also insure fully against Knightian uncertainty. When … the level of ambiguity exceeds a critical threshold, full insurance no longer prevails and there exist equilibria with …

We review recent advances in the field of decision making under uncertainty or ambiguity. …

roll over their loans or not. We use a non-Bayesian approach where creditors exhibit some aversion to ambiguity. We show … that an increase in ambiguity reduces the perceived coordination of players in rolling over their loans. This contibutes to …

with optimism, and vice versa, which leads ambiguity to have opposite effects in the two models. We can also rationalize …