Feedback design in games with ambiguity-averse players

Frederic Koessler and Marieke Pahlke

Journal of Economic Theory, 2025, vol. 225, issue C

Abstract: We use a notion of maxmin self-confirming equilibrium (MSCE) to study the design of players' information feedback about others' behavior in simultaneous-move games with ambiguity-averse players. Coarse feedback shapes strategic uncertainty and can, therefore, modify players' equilibrium strategies in an advantageous way. We characterize MSCE and study the equilibrium implications of coarse feedback in various classes of games. We show how feedback should be optimally designed to improve contributions in generalized volunteer dilemmas and public good games with strategic substitutes, strategic complements, or more general production functions. We also study games with negative externalities and strategic substitutes, such as Cournot oligopolies. In general, perfect and no feedback are suboptimal. Some results are extended to α-maxmin preferences.

Keywords: Self-confirming equilibrium; Ambiguity aversion; Information feedback; Strategic uncertainty; Public good games; Volunteer dilemma (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:225:y:2025:i:c:s002205312500033x

DOI: 10.1016/j.jet.2025.105987

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