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Are the Treasures of Game Theory Ambiguous?

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  • Eichberger, Jürgen

    ()
    (Sonderforschungsbereich 504)

  • Kelsey, David

    ()
    (Department of Economics, The University of Birmingham)

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 Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number 08-08.

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Length: 33 pages
Date of creation: 27 May 2008
Date of revision:
Handle: RePEc:xrs:sfbmaa:08-08

Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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References

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Citations

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Cited by:
  1. Adam Dominiak & Jean-Philippe Lefort, 2013. "Agreement theorem for neo-additive beliefs," Economic Theory, Springer, vol. 52(1), pages 1-13, January.
  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, vol. 8(4), pages 507-531, November.
  3. Robert Nau, 2011. "Risk, ambiguity, and state-preference theory," Economic Theory, Springer, vol. 48(2), pages 437-467, October.
  4. Thomas Jungbauer & Klaus Ritzberger, 2011. "Strategic games beyond expected utility," Economic Theory, Springer, vol. 48(2), pages 377-398, October.
  5. Carmela Di Mauro & Massimo Finocchiaro Castro, 2011. "Kindness, confusion, or … ambiguity?," Experimental Economics, Springer, vol. 14(4), pages 611-633, November.
  6. Lombardi, Michele & Yoshihara, Naoki, 2011. "A Full Characterization of Nash Implementation with Strategy Space Reduction," Discussion Paper Series a548, Institute of Economic Research, Hitotsubashi University.
  7. Tatjana Chudjakow & Frank Riedel, 2009. "The Best Choice Problem under ambiguity," Working Papers 413, Bielefeld University, Center for Mathematical Economics.
  8. Fujii, Tomoki, 2014. "Dynamic Poverty Decomposition Analysis: An Application to the Philippines," ADBI Working Papers 466, Asian Development Bank Institute.
  9. 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.
  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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