Bochet, Olivier; Laurent-Lucchetti, Jeremy; Leroux, Justin - Institut d'Economie et Econométrie, Université de Genève - 2013
It is commonly found that uncertainty helps discipline economic agents in strategic contexts. Using a stochastic variant of the Nash Demand Game, we show that the presence of uncertainty may have a dramatically opposite effect. Cautious (efficient) and dangerous (inefficient) equilibria may...