Cooperation with Strategy-Dependent Uncertainty Attitude
AbstractThe paper shows that in a Prisoner’s Dilemma Knightian uncertainty, formalised by multiple priors, may entail cooperation at a generalised Nash Equilibrium. The main idea is that players may have an attitude towards uncertainty that depends upon their available strategies. In particular, if players anticipate to be sufficiently more optimistic when choosing to cooperate, than when defecting, then they may indeed cooperate. Though uncommon in economic modelling, choice-dependent uncertainty attitude formalises a behaviour which is well understood and widely accepted by cognitive psychologists, within the theory of Cognitive Dissonance.
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Bibliographic InfoPaper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 457.
Date of creation: Jul 2005
Date of revision:
Cooperation; Cognitive Dissonance; Equilibrium; Games; Uncertainty;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-11-09 (All new papers)
- NEP-CBE-2005-11-09 (Cognitive & Behavioural Economics)
- NEP-EVO-2005-11-09 (Evolutionary Economics)
- NEP-GTH-2005-11-09 (Game Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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