Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93786
Authors: 
Schipper, Burkhard C.
Year of Publication: 
2005
Series/Report no.: 
SFB/TR 15 Discussion Paper 68
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
overconfidence
supermodularity
aggregative games
monotone comparative statics
playing the field
evolution of preferences
JEL: 
C72
C73
D01
D43
D81
L13
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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