Strategic ambiguity and decision-making: an experimental study

We conducted a set of experiments to compare the effect of ambiguity in single-person decisions and games. Our results suggest that ambiguity has a bigger impact in games than in ball and urn problems. We find that ambiguity has the opposite effect in games of strategic substitutes and complements....

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Bibliographic Details
Published inTheory and decision Vol. 84; no. 3; pp. 387 - 404
Main Authors Kelsey, David, le Roux, Sara
Format Journal Article
LanguageEnglish
Published New York Springer US 01.05.2018
Springer Nature B.V
Subjects
Ambiguity
Balls
Behavioral/Experimental Economics
Decision making
Decisions
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Experiments
Finance
Game Theory
Games
Insurance
Management
Operations Research/Decision Theory
Social and Behav. Sciences
Social research
Statistics for Business
Ellsberg urn
Strategic complements
Strategic substitutes
Ambiguity
Choquet expected utility
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ISSN0040-5833
1573-7187
DOI10.1007/s11238-017-9618-8

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Summary:We conducted a set of experiments to compare the effect of ambiguity in single-person decisions and games. Our results suggest that ambiguity has a bigger impact in games than in ball and urn problems. We find that ambiguity has the opposite effect in games of strategic substitutes and complements. This confirms a theoretical prediction made by Eichberger and Kelsey (J Econ Theory 106:436–466, 2002 ). In addition, we note that subjects’ ambiguity attitudes appear to be context dependent: ambiguity loving in single-person decisions and ambiguity averse in games. This is consistent with the findings of Kelsey and le Roux (Theory Decis 79:667–688, 2015 ).
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ISSN:0040-5833
1573-7187
DOI:10.1007/s11238-017-9618-8