The Effect of Ambiguity in Strategic Environments: an Experiment

Pablo Brañas-Garza, Antonio Cabrales, Maria Paz Espinosa and Diego Jorrat

No 196, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)

Abstract: We experimentally study a game in which success requires a sufficient total contribution by members of a group. There are significant uncertainties surrounding the chance and the total effort required for success. A theoretical model with max-min preferences towards ambiguity predicts higher contributions under ambiguity than under risk. However, in a large representative sample of the Spanish population (1,500 participants) we find that the ATE of ambiguity on contributions is zero. The main significant interaction with the personal characteristics of the participants is with risk attitudes, and it increases contributions. This suggests that policymakers concernedwith ambiguous problems (like climate change) do not need to worry excessively about ambiguity.

Pages: 45 pages
Date: 2022-11
New Economics Papers: this item is included in nep-env, nep-exp, nep-gth, nep-ltv and nep-res
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Citations: View citations in EconPapers (1)

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Working Paper: The effect of ambiguity in strategic environments: an experiment (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:aoz:wpaper:196

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