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Strategic Ambiguity and Decision-making: An Experimental Study

Author

Listed:
  • Dudley Cooke

    (Department of Economics, University of Exeter)

  • Sara le Roux

    (Department of Economics, Oxford Brookes University)

Abstract

We conducted a set of experiments to compare the effect of ambiguity in single person decisions and games. Our results suggest that ambiguity has a bigger impact in games than in ball and urn problems. We ?nd that ambiguity has the opposite effect in games of strategic substitutes and complements. This con?rms a theoretical prediction made by Eichberger and Kelsey (2002). The experiments also test whether subjects' ?perception of ambiguity differs when faced by a local opponent as opposed to a foreign one. Our results show that there is little evidence of more in?uence of ambiguity on behaviour when faced by foreign subjects.

Suggested Citation

  • Dudley Cooke & Sara le Roux, 2016. "Strategic Ambiguity and Decision-making: An Experimental Study," Discussion Papers 1605, University of Exeter, Department of Economics.
    • Handle: RePEc:exe:wpaper:1605
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    References listed on IDEAS

    as
    1. Gary Charness & Edi Karni & Dan Levin, 2013. "Ambiguity attitudes and social interactions: An experimental investigation," Journal of Risk and Uncertainty, Springer, vol. 46(1), pages 1-25, February.
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    4. Chateauneuf, Alain & Eichberger, Jurgen & Grant, Simon, 2007. "Choice under uncertainty with the best and worst in mind: Neo-additive capacities," Journal of Economic Theory, Elsevier, vol. 137(1), pages 538-567, November.
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    6. Jürgen Eichberger & David Kelsey, 2014. "Optimism And Pessimism In Games," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55, pages 483-505, May.
    7. David Kelsey & Sara Le Roux, 2017. "Dragon Slaying with Ambiguity: Theory and Experiments," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(1), pages 178-197, February.
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    More about this item

    Keywords

    Ambiguity; Choquet expected utility; strategic complements; strategic substitutes; Ellsberg urn.;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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