Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/22941
Authors: 
Schipper, Burkhard C.
Year of Publication: 
2005
Series/Report no.: 
Bonn econ discussion papers 2005,35
Abstract: 
We provide an evolutionary foundation to evidence that in some situations humans maintain optimistic or pessimistic attitudes towards uncertainty and are ignorant to relevant aspects of the environment. Players in strategic games face Knightian uncertainty about opponents? actions and maximize individually their Choquet expected utility. Our Choquet expected utility model allows for both an optimistic or pessimistic attitude towards uncertainty as well as ignorance to strategic dependencies. An optimist (resp. pessimist) overweights good (resp. bad) outcomes. A complete ignorant never reacts to opponents? change of actions. With qualifications we show that optimistic (resp. pessimistic) complete ignorance is evolutionary stable / yields a strategic advantage in submodular (resp. supermodular) games with aggregate externalities. Moreover, this evolutionary stable preference leads to Walrasian behavior in those classes of games.
Subjects: 
ambiguity
Knightian uncertainty
Choquet expected utility
neo-additive capacity
Hurwicz criterion
Maximin
Minimax
Ellsberg paradox
JEL: 
L13
D43
C72
D81
D01
C73
Document Type: 
Working Paper

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