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The war of attrition under uncertainty : theory and robust testable implications

Décamps, Jean-Paul; Gensbittel, Fabien; Mariotti, Thomas - 2023

We study a generic model of the war of attrition with symmetric information and stochastic payoffs that depend on a homogeneous linear diffusion. We first show that a player's mixed Markov strategy can be represented by an intensity measure over the state space together with a subset of the...

Persistent link: https://www.econbiz.de/10014443822

On the psychological foundations of ambiguity and compound risk aversion

Wu, Keyu; Fehr, Ernst; Hofland, Sean; Schonger, Martin - 2024

attitudes towards ambiguity and compound risk which suggests that compound risk aversion may provide a psychological foundation … for ambiguity aversion. However, compound risk aversion and ambiguity aversion may also be independent psychological …’s ability to reduce compound to simple risks, and analyzing how this affects their compound risk and ambiguity attitudes in …

Persistent link: https://www.econbiz.de/10014551421

Export decision under risk

Sousa, José de; Disdier, Anne-Célia; Gaigné, Carl - 2016

regularities by developing a new firmbased trade model wherein managers are risk averse. Higher volatility induces the reallocation …

Persistent link: https://www.econbiz.de/10011547934

Ambiguity aversion is the exception

Kocher, Martin; Lahno, Amrei Marie; Trautmann, Stefan T. - 2015

An extensive literature has studied ambiguity aversion in economic decision making, and how ambiguity aversion can account for empirically observed violations of expected utility-based theories. Almost all relevant applied models presume a general dislike of ambiguity. In this paper, we provide...

Persistent link: https://www.econbiz.de/10010496989

The design of ambiguous mechanisms

Di Tillio, Alfredo; Kos, Nenad; Messner, Matthias - 2014

This paper explores the sale of an object to an ambiguity averse buyer. We show that the seller can increase his profit by using an ambiguous mechanism. That is, the seller can benefit from hiding certain features of the mechanism that he has committed to from the agent. We then characterize the...

Persistent link: https://www.econbiz.de/10010399062

Selling to the mean

Kos, Nenad; Messner, Matthias - 2015

We study optimal selling strategies of a seller who is poorly informed about the buyer’s value for the object. When the maxmin seller only knows that the mean of the distribution of the buyer's valuations belongs to some interval then nature can keep him to payoff zero no matter how much...

Persistent link: https://www.econbiz.de/10011298549

International environmental agreements with uncertainty, learning and risk aversion

Finus, Michael; Pintassilgo, Pedro; Ulph, Alistair - 2014

role of learning and risk aversion. It bridges two strands of literature: one focused on the role learning for the success … of IEA formation when countries are risk neutral and another that explores the implications of uncertainty and risk … aversion on IEA formation under no learning. Combining learning and risk aversion seems appropriate as the uncertainties …

Persistent link: https://www.econbiz.de/10010234539

Strict incentives and strategic uncertainty

Carlsson, Hans; Wichardt, Philipp C. - 2019 - This Version: June 10, 2019

This paper proposes a comprehensive perspective on the question of self-enforcing solutions for normal form games. While this question has been widely discussed in the literature, the focus is usually either on strict incentives for players to stay within the proposed solution or on strategic...

Persistent link: https://www.econbiz.de/10012029170

On the sensitivity of collective action to uncertainty about climate tipping points

Barrett, Scott; Dannenberg, Astrid - 2014

Previous research shows that collective action to avoid a catastrophic threshold, such as a climate "tipping point", is unaffected by uncertainty about the impact of crossing the threshold but that collective action collapses if the location of the threshold is uncertain. Theory suggests that...

Persistent link: https://www.econbiz.de/10010249688

The role of interpersonal uncertainty in prosocial behavior

Chakraborty, Anujit; Henkel, Luca - 2024

In prosocial decisions, decision-makers are inherently uncertain about how their decisions impact others’ utility – we call this interpersonal uncertainty. We show that people’s response to interpersonal uncertainty shapes well-known patterns of prosocial behavior. First, using standard...

Persistent link: https://www.econbiz.de/10014576953