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Sequential Two-Player Games with Ambiguity

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  • Eichberger, Jürgen

    () (Sonderforschungsbereich 504)

  • Kelsey, David

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

Abstract

If players' beliefs are strictly non-additive, the Dempster-Shafer updating rule can be used to define beliefs off the equilibrium path. We define an equilibrium concept in sequential two-person games where players update their beliefs with the Dempster-Shafer updating rule. We show that in the limit as uncertainty tends to zero, our equilibrium approximates Bayesian Nash equilibrium by imposing context-dependent constraints on beliefs under uncertainty.

Suggested Citation

  • Eichberger, Jürgen & Kelsey, David, 2003. "Sequential Two-Player Games with Ambiguity," Sonderforschungsbereich 504 Publications 03-27, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  • Handle: RePEc:xrs:sfbmaa:03-27
    Note: Financial assistance from the ESRC senior research fellowship scheme, award no. H52427502595, the School of Social Science at the University of Birmingham, the Department of Economics at the University of Melbourne and The British Academy is gratefully acknowledged. For comments we would like to thank Simon Grant, Hans Haller, Youngse Kim, Bart Lipman, Frank Milne, Shasi Nandeibam, Hyun Shin, Peter Sinclair, Willy Spanjers, Martin Summer, Peter Wakker and participants in seminars at Queen
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    References listed on IDEAS

    as
    1. Ryan, Matthew J., 2002. "Violations of Belief Persistence in Dempster-Shafer Equilibrium," Games and Economic Behavior, Elsevier, vol. 39(1), pages 167-174, April.
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    Citations

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    Cited by:

    1. Eichberger, Jürgen & Grant, Simon & Lefort, Jean-Philippe, 2008. "Neo-additive capacities and updating," Papers 08-31, Sonderforschungsbreich 504.
    2. Jürgen Eichberger & David Kelsey, 2011. "Are the treasures of game theory ambiguous?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 48(2), pages 313-339, October.
    3. Roman Kozhan, 2011. "Non-additive anonymous games," International Journal of Game Theory, Springer;Game Theory Society, vol. 40(2), pages 215-230, May.
    4. Pulford, Briony D. & Colman, Andrew M., 2007. "Ambiguous games: Evidence for strategic ambiguity aversion," MPRA Paper 86345, University Library of Munich, Germany.
    5. Dominiak, Adam & Lee, Min Suk, 2017. "Coherent Dempster–Shafer equilibrium and ambiguous signals," Journal of Mathematical Economics, Elsevier, vol. 68(C), pages 42-54.
    6. Stauber, Ronald, 2017. "Irrationality and ambiguity in extensive games," Games and Economic Behavior, Elsevier, vol. 102(C), pages 409-432.

    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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