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A simple measure of strategic uncertainty attitudes

Author

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  • Lisa Bruttel

    (University of Potsdam, Berlin School of Economics, CEPA)

Abstract

This paper introduces a simple incentivized measure of individual attitudes towards strategic uncertainty. This measure is based on the idea that the size of the difference between the expected profit from playing a game and the value that an individual places on playing that game provides information about how much they like or dislike the strategic uncertainty involved. This measure explains trusting decisions in the trust game, where standard risk aversion measures have no explanatory power. Furthermore, it correlates across different games and predicts behavior associated with strategic uncertainty outside the laboratory.

Suggested Citation

  • Lisa Bruttel, 2026. "A simple measure of strategic uncertainty attitudes," CEPA Discussion Papers 107, Center for Economic Policy Analysis.
    • Handle: RePEc:pot:cepadp:107
    DOI: 10.25932/publishup-71404
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    Keywords

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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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