Strategic Ambiguity and Decision-Making: An Experimental Study
Theory and Decision, June 2017
24 Pages Posted: 2 Aug 2016 Last revised: 5 Jun 2017
Date Written: May 16, 2017
We conducted a set of experiments to compare the effect of ambiguity in single person decisions and games. Our results suggest that ambiguity has a bigger impact in games than in ball and urn problems. We find that ambiguity has the opposite effect in games of strategic substitutes and complements. This confirms a theoretical prediction made by Eichberger and Kelsey (2002). In addition, we note that subjects' ambiguity-attitudes appear to be context dependent: ambiguity-loving in single person decisions and ambiguity-averse in games. This is consistent with the findings of Kelsey and le Roux (2015).
Keywords: Ambiguity; Choquet expected utility; strategic complements; strategic substitutes; Ellsberg urn
JEL Classification: C72, C91, D03, D81
Suggested Citation: Suggested Citation