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Are the Treasures of Game Theory Ambiguous?

  • Eichberger, Jürgen

    ()

    (Sonderforschungsbereich 504)

  • Kelsey, David

    ()

    (Department of Economics, The University of Birmingham)

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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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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