Dragon Slaying and Dyke Building - How Does Ambiguity Affect Individual Behaviour?

20 Pages Posted: 6 Sep 2013

See all articles by Sara le Roux

Sara le Roux

Oxford Brookes University - Department of Economics

David Kelsey

University of Exeter Business School - Department of Economics

Date Written: September 1, 2013

Abstract

This paper reports experiments conducted to test whether ambiguity affects individual behaviour in games of strategic complements and strategic substitutes. We study subject behaviour in the presence of ambiguity in order to ascertain whether subjects' perception of ambiguity differs between a local opponent and a foreign one. We find that an ambiguity safe strategy, which is not chosen in a Nash equilibrium, is often chosen by subjects. This gives a strong indication that ambiguity aversion influences subject behaviour in games.

Keywords: Choquet expected utility, strategic complements, strategic substitutes, weakest link games, best shot games

JEL Classification: C72, C91, D03, D81, H41

Suggested Citation

le Roux, Sara and Kelsey, David, Dragon Slaying and Dyke Building - How Does Ambiguity Affect Individual Behaviour? (September 1, 2013). Available at SSRN: https://ssrn.com/abstract=2320519 or http://dx.doi.org/10.2139/ssrn.2320519

Sara Le Roux (Contact Author)

Oxford Brookes University - Department of Economics ( email )

Oxford Brookes Business School
Headington Campus
Oxford, OX3 0BP
United Kingdom

HOME PAGE: http://saraleroux.weebly.com/

David Kelsey

University of Exeter Business School - Department of Economics ( email )

Streatham Court
Exeter, Devon EX4 4PU
United Kingdom
013 9226 2536 (Phone)

HOME PAGE: http://people.exeter.ac.uk/dk210/

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