Attitudes to ambiguity in one-shot normal-form games: An experimental study

https://doi.org/10.1016/j.geb.2010.05.009Get rights and content

Abstract

Based on an experiment in the lab, we classify behavior in one-shot normal-form games along three important dimensions. The first dimension, which is of main interest, is about whether subjects are ambiguity-loving, ambiguity-neutral, or ambiguity-averse. The second dimension is about whether subjects are risk-loving, risk-neutral, or risk-averse. The third dimension is about whether subjects are naive or strategic. Our main result is that, in our main treatment, 32/46/22 percent of subjects are classified as ambiguity-loving/ambiguity-neutral/ambiguity-averse.

References (39)

  • Dale Stahl et al.

    On players' models of other players: Theory and experimental evidence

    Games Econ. Behav.

    (1995)
  • R. Aumann et al.

    Epistemic conditions for nash equilibrium

    Econometrica

    (1995)
  • L.R. Beach et al.

    Subjective probabilities inferred from estimates and bets

    J. Exper. Psych.

    (1967)
  • Colin F. Camerer et al.

    Recent developments in modeling preferences: Uncertainty and ambiguity

    J. Risk Uncertainty

    (1992)
  • Colin F. Camerer et al.

    Ambiguity-aversion and non-additive beliefs in non-cooperative games: Experimental evidence

  • G. Choquet

    Theory of capacities

    Ann. Inst. Fourier (Grenoble)

    (1955)
  • Clare Chua Chow et al.

    Comparative Ignorance and the ellsberg paradox

    J. Risk Uncertainty

    (2001)
  • Miguel A. Costa-Gomes et al.

    Cognition and behavior in two-person guessing games: An experimental study

    Amer. Econ. Rev.

    (2006)
  • Miguel Costa-Gomes et al.

    Cognition and behavior in normal-form games: An experimental study

    Econometrica

    (2001)
  • Cited by (31)

    • Experimental methods: Eliciting beliefs

      2021, Journal of Economic Behavior and Organization
    • Do people minimize regret in strategic situations? A level-k comparison

      2020, Games and Economic Behavior
      Citation Excerpt :

      At the beginning of the experiment, the computer randomly assigned subjects to the roles of either a row player or a column player, and those roles were maintained throughout the experiment. Since we were mainly interested in the decisions of row players, only two subjects were assigned to the role of column player in each session, and we focused on the behavior of row players (see, e.g., Ivanov, 2011, for the same approach). Both roles were visualized from the row player's perspective, so no player had information about the role to which they were assigned.

    • Social and strategic ambiguity versus betrayal aversion

      2020, Games and Economic Behavior
      Citation Excerpt :

      Empirical studies began to appear only recently. These include Calford (2020), Chark and Chew (2015), Dominiak and Duersch (2019), Eichberger and Kelsey (2011), Ivanov (2011), and Kelsey and le Roux (2015, 2018). Traditionally, ambiguity attitudes were measured using artificial events such as Ellsberg urns with compositions kept secret or experimenter-specified probability intervals where the exact probability was kept secret.

    • Uncertainty aversion in game theory: Experimental evidence

      2020, Journal of Economic Behavior and Organization
      Citation Excerpt :

      Li et al. (2019) apply an insight from Baillon et al. (2018) to separate ambiguity attitudes from (non-additive) beliefs, and find that both ambiguity preferences and beliefs are correlated with behavior in a trust game. Ivanov (2011) estimates ambiguity preferences from behavior in games (rather than eliciting preferences and then studying behavior in games as is the case here). Both Li et al. (2019) and Ivanov (2011) elicit beliefs over opponent’s strategies, in contrast to the current paper which induces beliefs over opponent’s preferences.

    View all citing articles on Scopus
    1

    I would like to thank Dan Levin and John Kagel for their advice and financial support. I would also like to thank Stephen Cosslett, David Harless, Oleg Korenok, Muriel Niederle, James Peck, and Susan Rose for their help and valuable suggestions. Last, but not least, I thank an Advisory Editor and two anonymous referees for their comments and suggestions. This material is based upon work supported by the NSF under doctoral dissertation grant SES-0609744. Any opinions, findings, and conclusions or recommendations expressed are those of the authors and do not necessarily reflect the views of the NSF.

    View full text