Optimism and Pessimism in Games

Jürgen Eichberger and David Kelsey

No 905, Discussion Papers from University of Exeter, Department of Economics

Abstract: This paper considers the impact of ambiguity in strategic situations. It extends the earlier literature by allowing for optimistic responses to ambiguity. Ambiguity is modelled by CEU preferences. We propose a new solution concept for players who may express ambiguity- preference. Then we study comparative statics of changes in ambiguity-attitude in games with strategic complements. This gives a precise statement of the impact of ambiguity on economic behaviour.

Keywords: Ambiguity in games; support; strategic complementarity; optimism; multiple equilibria. (search for similar items in EconPapers)
JEL-codes: C72 D81 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (12)

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Related works:
Working Paper: Optimism and Pessimism in Games (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:exe:wpaper:0905

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