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The effect of ambiguity in strategic environments: an experiment

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  • Pablo Bra~nas-Garza
  • Antonio Cabrales
  • Mar'ia Paz Espinosa
  • Diego Jorrat

Abstract

We experimentally study a game in which success requires a sufficient total contribution by members of a group. There are significant uncertainties surrounding the chance and the total effort required for success. A theoretical model with max-min preferences towards ambiguity predicts higher contributions under ambiguity than under risk. However, in a large representative sample of the Spanish population (1,500 participants) we find that the ATE of ambiguity on contributions is zero. The main significant interaction with the personal characteristics of the participants is with risk attitudes, and it increases contributions. This suggests that policymakers concerned with ambiguous problems (like climate change) do not need to worry excessively about ambiguity.

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  • Pablo Bra~nas-Garza & Antonio Cabrales & Mar'ia Paz Espinosa & Diego Jorrat, 2022. "The effect of ambiguity in strategic environments: an experiment," Papers 2209.11079, arXiv.org.
    • Handle: RePEc:arx:papers:2209.11079
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    References listed on IDEAS

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    1. Pablo Brañas-Garza & Antonio Cabrales & María Paz Espinosa & Teresa García-Muñoz, 2024. "Behind the Support for Redistributive Politics: Social Preferences or Beliefs?," CESifo Working Paper Series 11238, CESifo.

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