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Ellsberg games

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  • Frank Riedel
  • Linda Sass

Abstract

In the standard formulation of game theory, agents use mixed strategies in the form of objective and probabilistically precise devices to conceal their actions. We introduce the larger set of probabilistically imprecise devices and study the consequences for the basic results on normal form games. While Nash equilibria remain equilibria in the extended game, there arise new Ellsberg equilibria with distinct outcomes, as we illustrate by negotiation games with three players. We characterize Ellsberg equilibria in two-person conflict and coordination games. These equilibria turn out to be related to experimental deviations from Nash equilibrium play. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Frank Riedel & Linda Sass, 2014. "Ellsberg games," Theory and Decision, Springer, vol. 76(4), pages 469-509, April.
    • Handle: RePEc:kap:theord:v:76:y:2014:i:4:p:469-509
    DOI: 10.1007/s11238-013-9381-4
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    Cited by:

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    3. Giuseppe De Marco & Maria Romaniello, 2014. "Variational Preferences and Equilibria in Games under Ambiguous Beliefs Correspondences," CSEF Working Papers 363, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    4. Kellner, Christian & Le Quement, Mark T., 2017. "Modes of ambiguous communication," Games and Economic Behavior, Elsevier, vol. 104(C), pages 271-292.
    5. Dorian Beauchêne, 2016. "Solution concepts for games with ambiguous payoffs," Theory and Decision, Springer, vol. 80(2), pages 245-269, February.
    6. Muraviev, Igor & Riedel, Frank & Sass, Linda, 2017. "Kuhn’s Theorem for extensive form Ellsberg games," Journal of Mathematical Economics, Elsevier, vol. 68(C), pages 26-41.
    7. Grant, Simon & Meneghel, Idione & Tourky, Rabee, 2016. "Savage games," Theoretical Economics, Econometric Society, vol. 11(2), May.
    8. Stauber, Ronald, 2017. "Irrationality and ambiguity in extensive games," Games and Economic Behavior, Elsevier, vol. 102(C), pages 409-432.

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    More about this item

    Keywords

    Knightian uncertainty in games; Strategic ambiguity; Ellsberg games; C72; D81;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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