Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/175872
Authors: 
Riedel, Frank
Year of Publication: 
2017
Series/Report no.: 
Center for Mathematical Economics Working Papers 571
Abstract: 
This text reviews a recent approach to modeling "radically uncertain" behavior in strategic interactions. By rigorously rooting the approach in decision theory, we provide a foundation for applications of Knightian uncertainty in mechanism design, principal agent and moral hazard models. We discuss critical assessments and provide alternative interpretations of the new equilibria in terms of equilibrium in beliefs, and as a boundedly rational equilibrium in the sense of a population equilibrium. We also discuss the purification of equilibria in the spirit of Harsanyi.
Subjects: 
Knightian Uncertainty in Games
Strategic Ambiguity
Ellsberg Games
Purification
JEL: 
C72
D81
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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