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Strategic behavior of non-expected utility players in games with payoff uncertainty

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  • Kauffeldt, T. Florian

Abstract

This paper investigates whether the strategic behavior of expected utility players differs from that of non-expected utility players in the context of incomplete information games where players can choose mixed strategies. Two conditions are identified where uncertainty-averse non-expected utility players behave differently from expected utility players. These conditions concern the use of mixed strategies and the response to it. It is shown that, if and only if these conditions fail, nonexpected utility players behave as if they were expected utility players. The paper provides conditions, in terms of the payoff structure of a game, which are necessary and sufficient for behavioral differences between expected and non-expected utility players. In this context, games are analyzed that are especially relevant for the design of experiments.

Suggested Citation

  • Kauffeldt, T. Florian, 2016. "Strategic behavior of non-expected utility players in games with payoff uncertainty," Working Papers 0614, University of Heidelberg, Department of Economics.
    • Handle: RePEc:awi:wpaper:0614
    Note: This paper is part of http://archiv.ub.uni-heidelberg.de/volltextserver/view/schriftenreihen/sr-3.html
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    References listed on IDEAS

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    Keywords

    Non-expected utility; Incomplete information games; Uncertainty aversion; Mixed strategies; Strategic behavior;
    All these keywords.

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