Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/31338
Authors: 
Eichberger, Jürgen
Kelsey, David H.
Schipper, Burkhard C.
Year of Publication: 
2005
Series/Report no.: 
Working papers // University of California, Department of Economics 05,36
Abstract: 
We present a non-technical account of ambiguity in strategic games and show how it may be applied to economics and social sciences. 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. In addition the effects of ambiguity on peace-making are examined. It is shown that ambiguity may select equilibria in coordination games with multiple equilibria. Some comparative statics results are derived for the impact of ambiguity in games with strategic complements.
JEL: 
C72
D43
D62
D81
Document Type: 
Working Paper

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