We seek an evolutionary explanation for why in some situations humans maintain either optimistic or pessimistic attitudes toward uncertainty and are ignorant to relevant aspects of their environment. Players in strategic games face Knightian uncertainty about opponents’ actions and maximize individually their Choquet expected utility with respect to neo-additive capacities allowing for both an optimistic or pessimistic attitude toward uncertainty as well as ignorance to strategic dependencies. An optimist overweighs good outcomes. A complete ignorant never reacts to opponents’ changes of (...) actions. We focus on sub- and supermodular aggregative games and provide monotone comparative statics w.r.t. optimism/pessimism. With qualifications, we show that in finite populations, optimistic complete ignorance is evolutionary stable and yields a strategic advantage in submodular games with aggregate externalities. Moreover, this evolutionary stable preference leads to Walrasian behavior in these classes of games. (shrink)

Using belief elicitation, the paper investigates the process of belief formation and evolution in a signaling game in which a common prior is not induced. Both prior and posterior beliefs of Receivers about Senders’ types are elicited, as well as beliefs of Senders about Receivers’ strategies. In the experiment, subjects often start with diffuse uniform beliefs and update them in view of observations. However, the speed of updating is influenced by the strength of initial beliefs. An interesting result is that (...) beliefs about the prior distribution of types are updated slower than posterior beliefs, which incorporate Senders’ strategies. In the medium run, for some specifications of game parameters, this leads to outcomes being significantly different from the outcomes of the game in which a common prior is induced. It is also shown that elicitation of beliefs does not considerably change the pattern of play in this game. (shrink)

Cultural differences can be a source of ambiguity in coordination games. As players are likely to experience more ambiguity when playing a different culture, we expect players to choose safer strategies. We run experiments with a stag hunt and bargaining coordination game. Using a between-subjects design, we vary the identity of the opponent between someone of the same culture or a different culture. We compare the responses of British and East Asian students at the University of Exeter and show the (...) cultural identity of the opponent by physical appearance. While we find no significant differences between treatments for East Asians, the British choose the safer option in the stag hunt and demand more of the pie in the bargaining game when faced with an opponent from a different culture. (shrink)

I present an experiment on learning about a game in an initially unknown environment. Subjects play repeatedly simple 2 × 2 normal-form coordination games. I compare behavioral learning algorithms for different feedback information. Minimal feedback only informs about own payoffs, while additional feedback informs about own payoffs and the opponent’s choice. Results show that minimal feedback information leads to a myopic learning algorithm, while additional feedback induces non-myopic learning and increases the impulse with which players respond to payoff differences. Finally, (...) there is evidence for a strategy transfer across games which differ only according to the relabel of actions, but not according to permutation in the payoff matrix. (shrink)

We conducted a set of experiments to compare the effect of ambiguity in single-person decisions and games. Our results suggest that ambiguity has a bigger impact in games than in ball and urn problems. We find that ambiguity has the opposite effect in games of strategic substitutes and complements. This confirms a theoretical prediction made by Eichberger and Kelsey. In addition, we note that subjects’ ambiguity attitudes appear to be context dependent: ambiguity loving in single-person decisions and ambiguity averse in (...) games. This is consistent with the findings of Kelsey and le Roux. (shrink)

We report an experimental test of the influence of ambiguity on behaviour in a coordination game. We study the behaviour of subjects in the presence of ambiguity and attempt to determine whether they prefer to choose an ambiguity-safe option. We find that this strategy, which is not played in either Nash equilibrium or iterated dominance equilibrium, is indeed chosen quite frequently. This provides evidence that ambiguity-aversion influences behaviour in games. While the behaviour of the Row Player is consistent with randomising (...) between her strategies, the Column Player shows a marked preference for avoiding ambiguity and choosing his ambiguity-safe strategy. (shrink)