Template-Type: ReDIF-Paper 1.0
Title: Ambiguity and Social Interaction
Author-Name: Juergen Eichberger
Author-Name: David Kelsey
Author-Name: Burkhard C. Schipper
Author-Email: 
Classification-JEL: C72, D43, D62, D81
Keywords: Ambiguity, Optimism, Oligopoly, Peace processes, Choquet expected utility
Abstract: We examine the impact of ambiguity on economic behaviour. We present a relatively non-technical account 
	of ambiguity and show how it may be applied in economics. Optimistic and pessimistic responses to ambiguity are 
	formally modelled. We show that pessimism has the effect of increasing (decreasing) equilibrium prices under 
	Cournot (Bertrand) competition. We also examine the effects of ambiguity on peace processes. It is shown that 
	ambiguity can act to select equilibria in coordination games with multiple equilibria. Some comparative statics 
	results are derived for the impact of ambiguity in games with strategic complements. 
Note: 
Length: 48
Creation-Date: 2003-07	
Revision-Date: 
File-URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonedp/bgse23_2003.pdf
File-Format: application/pdf
Handle: RePEc:bon:bonedp:bgse23_2003