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Are the Treasures of Game Theory Ambiguous?

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  • Jürgen Eichberger

    ()
    (University of Heidelberg, Department of Economics)

  • David Kelsey

    ()
    (University of of Exeter, School of Business and Economics)

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

Paper provided by University of Heidelberg, Department of Economics in its series Working Papers with number 0469.

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Length: 34 pages
Date of creation: Jul 2008
Date of revision: Jul 2008
Handle: RePEc:awi:wpaper:0469

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Keywords: Ambiguity; coordination games; experiments; traveller’s dilemma; matching pennies; optimism;

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References

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Citations

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Cited by:
  1. Tatjana Chudjakow & Frank Riedel, 2013. "The best choice problem under ambiguity," Economic Theory, Springer, Springer, vol. 54(1), pages 77-97, September.
  2. Gonçalo Faria & João Correia-da-Silva, 2012. "The price of risk and ambiguity in an intertemporal general equilibrium model of asset prices," Annals of Finance, Springer, Springer, vol. 8(4), pages 507-531, November.
  3. Michele Lombardi & Naoki Yoshihara, 2013. "A full characterization of nash implementation with strategy space reduction," Economic Theory, Springer, Springer, vol. 54(1), pages 131-151, September.
  4. Robert Nau, 2011. "Risk, ambiguity, and state-preference theory," Economic Theory, Springer, Springer, vol. 48(2), pages 437-467, October.
  5. Tomoki Fujii, 2012. "Dynamic Poverty Decomposition Analysis: An Application to the Philippines," Working Papers, Singapore Management University, School of Economics 34-2012, Singapore Management University, School of Economics.
  6. Dimitrios Diamantaras & Robert P. Gilles, 2010. "Ambiguity, Social Opinion and the Use of Common Property Resources," DETU Working Papers, Department of Economics, Temple University 1006, Department of Economics, Temple University.
  7. Thomas Jungbauer & Klaus Ritzberger, 2011. "Strategic games beyond expected utility," Economic Theory, Springer, Springer, vol. 48(2), pages 377-398, October.
  8. Brishti Guha, 2012. "Gambling on Genes: Ambiguity Aversion Explains Investment in Sisters’ Children," Working Papers, Singapore Management University, School of Economics 33-2012, Singapore Management University, School of Economics.
  9. Adam Dominiak & Jean-Philippe Lefort, 2013. "Agreement theorem for neo-additive beliefs," Economic Theory, Springer, Springer, vol. 52(1), pages 1-13, January.
  10. Carmela Di Mauro & Massimo Finocchiaro Castro, 2011. "Kindness, confusion, or … ambiguity?," Experimental Economics, Springer, Springer, vol. 14(4), pages 611-633, November.

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