Mixed strategies and preference for randomization in games with ambiguity averse agents

Evan Calford

ANU Working Papers in Economics and Econometrics from Australian National University, College of Business and Economics, School of Economics

Abstract: We study the use of mixed strategies in games by ambiguity averse agents with a preference for randomization. Applying the decision theoretic model of Saito (2015) to games, we establish that the set of rationalizable strategies grows larger as preferences for randomization weaken. An agent’s preference for randomization is partially observable: given the behavior of an agent in a game, we can determine an upper bound on the strength of randomization preferences for that agent. Notably, data in previous experiments on ambiguity aversion in games is not consistent with a maximal preference for randomization for approximately 30% of subjects.

Keywords: Ambiguity Aversion; Mixed Strategies; Game Theory (search for similar items in EconPapers)
JEL-codes: C70 C72 D81 (search for similar items in EconPapers)
Date: 2020-08
New Economics Papers: this item is included in nep-exp, nep-gth, nep-mic and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Mixed strategies and preference for randomization in games with ambiguity averse agents (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:acb:cbeeco:2020-675

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