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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

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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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