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Are the treasures of game theory ambiguous?

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  • Jürgen Eichberger
  • David Kelsey

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Abstract

Goeree & Holt (2001) observe that, for some parameter values, Nash equilibrium provides good predictions for actual behaviour in experiments. For other payoff parameters, however, actual behaviour deviates consistently from that predicted by Nash equilibria. They attribute the robust deviations from Nash equilibrium to actual players’ considering not only marginal gains and losses but also total pay-offs. In this paper, we show that optimistic and pessimistic attitudes towards strategic ambiguity may induce such behaviour.

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Bibliographic Info

Article provided by Springer in its journal Economic Theory.

Volume (Year): 48 (2011)
Issue (Month): 2 (October)
Pages: 313-339

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Handle: RePEc:spr:joecth:v:48:y:2011:i:2:p:313-339

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Related research

Keywords: Ambiguity; Coordination games; Experiments; Traveller’s dilemma; Matching pennies; Optimism; C72; D81;

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References

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Citations

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Cited by:
  1. Robert Nau, 2011. "Risk, ambiguity, and state-preference theory," Economic Theory, Springer, vol. 48(2), pages 437-467, October.
  2. Thomas Jungbauer & Klaus Ritzberger, 2011. "Strategic games beyond expected utility," Economic Theory, Springer, vol. 48(2), pages 377-398, October.
  3. Gonçalo Faria & João Correia-da-Silva, 2011. "The Price of Risk and Ambiguity in an Intertemporal General Equilibrium Model of Asset Prices," FEP Working Papers 399, Universidade do Porto, Faculdade de Economia do Porto.
  4. Michele Lombardi & Naoki Yoshihara, 2013. "A full characterization of nash implementation with strategy space reduction," Economic Theory, Springer, vol. 54(1), pages 131-151, September.
  5. Tatjana Chudjakow & Frank Riedel, 2013. "The best choice problem under ambiguity," Economic Theory, Springer, vol. 54(1), pages 77-97, September.
  6. Diamantaras, Dimitrios & Gilles, Robert P., 2011. "Ambiguity, social opinion and the use of common property resources," Journal of Economic Behavior & Organization, Elsevier, vol. 80(1), pages 210-222.
  7. Fujii, Tomoki, 2014. "Dynamic Poverty Decomposition Analysis: An Application to the Philippines," ADBI Working Papers 466, Asian Development Bank Institute.
  8. Carmela Di Mauro & Massimo Finocchiaro Castro, 2011. "Kindness, confusion, or … ambiguity?," Experimental Economics, Springer, vol. 14(4), pages 611-633, November.
  9. Adam Dominiak & Jean-Philippe Lefort, 2013. "Agreement theorem for neo-additive beliefs," Economic Theory, Springer, vol. 52(1), pages 1-13, January.
  10. Brishti Guha, 2012. "Gambling on Genes: Ambiguity Aversion Explains Investment in Sisters’ Children," Working Papers 33-2012, Singapore Management University, School of Economics.

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