Resource title

Ambiguity and Social Interaction

Resource image

image for OpenScout resource :: Ambiguity and Social Interaction

Resource description

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.

Resource author

J├╝rgen Eichberger, David H. Kelsey, Burkhard C. Schipper

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/22871

Resource license

Adapt according to the presented license agreement and reference the original author.