Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/179277 
Year of Publication: 
2017
Series/Report no.: 
Discussion Paper Series No. 638
Publisher: 
University of Heidelberg, Department of Economics, Heidelberg
Abstract: 
We propose a solution concept for a class of extensive form games with ambiguity. Specifically we consider multi-stage games. Players have CEU preferences. The associated ambiguous beliefs are revised by Generalized Bayesian Updating. We assume individuals take account of possible changes in their preferences by using consistent planning. We show that if there is ambiguity in the centipede game it is possible to sustain 'cooperation' for many periods as part of a consistent-planning equilibrium under ambiguity. In a non-cooperative bargaining game we show that ambiguity may be a cause of delay in bargaining.
Subjects: 
optimism
neo-additive capacity
dynamic consistency
consistent planning
centipede game
multi-stage game
JEL: 
D81
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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