Strategic Substitutes, Complements and Ambiguity: An Experimental Study

30 Pages Posted: 11 Nov 2014 Last revised: 22 Apr 2015

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: April 21, 2015

Abstract

We report the results from a set of experiments conducted to test the effect of ambiguity on individual behaviour in games of strategic complements and strategic substitutes. We test whether subjects' perception of ambiguity differs when faced by a local opponent as opposed to a foreign one. Interestingly, though subjects often choose an ambiguity safe strategy (not part of a Nash equilibrium), we do not find much difference in the ambiguity levels when faced by foreign subjects.

Keywords: Ambiguity; Choquet expected utility; strategic complements; strategic substitutes; Ellsberg urn

JEL Classification: C72, C91, D03, D81

Suggested Citation

le Roux, Sara and Kelsey, David, Strategic Substitutes, Complements and Ambiguity: An Experimental Study (April 21, 2015). Available at SSRN: https://ssrn.com/abstract=2521377 or http://dx.doi.org/10.2139/ssrn.2521377

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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