Ambiguity and Social Interaction

Jürgen Eichberger, David Kelsey and Burkhard Schipper

No 23/2003, Bonn Econ Discussion Papers from University of Bonn, Bonn Graduate School of Economics (BGSE)

Abstract: We examine the impact of ambiguity on economic behaviour. We present a relatively non-technical account of ambiguity and show how it may be applied in economics. Optimistic and pessimistic responses to ambiguity are formally modelled. We show that pessimism has the effect of increasing (decreasing) equilibrium prices under Cournot (Bertrand) competition. We also examine the effects of ambiguity on peace processes. It is shown that ambiguity can act to select equilibria in coordination games with multiple equilibria. Some comparative statics results are derived for the impact of ambiguity in games with strategic complements.

Keywords: Ambiguity; Optimism; Oligopoly; Peace processes; Choquet expected utility (search for similar items in EconPapers)
JEL-codes: C72 D43 D62 D81 (search for similar items in EconPapers)
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/22871/1/bgse23_2003.pdf (application/pdf)

Related works:
Journal Article: Ambiguity and social interaction (2009)
Working Paper: Ambiguity and Social Interaction (2007)
Working Paper: Ambiguity and Social Interaction (2005)
Working Paper: Ambiguity and Social Interaction (2005)
Working Paper: Ambiguity and Social Interaction (2005)
Working Paper: Ambiguity and social interaction (2003)
Working Paper: Ambiguity and Social Interaction (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:bonedp:232003

Access Statistics for this paper

More papers in Bonn Econ Discussion Papers from University of Bonn, Bonn Graduate School of Economics (BGSE) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().