Contests with ambiguity

David Kelsey and Tigran Melkonyan ()

Oxford Economic Papers, 2018, vol. 70, issue 4, 1148-1169

Abstract: The paper examines contests where players perceive ambiguity about their opponents’ strategies and determines how perceptions of ambiguity and attitudes to ambiguity affect equilibrium choice. Behaviour in our contest is affected by pessimistic and optimistic traits. Which of these traits dominates determines the relationship between the equilibrium under ambiguity (EUA) and behaviour where contenders have expected utility preferences. Our model can explain experimental results such as overbidding and overspreading relative to Nash predictions.

JEL-codes: C72 D7 D81 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (4)

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Working Paper: Contests with Ambiguity (2014)
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