Ellsberg's (1961) famous paradox shows that decision-makers give events with ‘known’ probabilities a higher weight in their outcome evaluation. In the same article, Ellsberg suggests a preference representation which has intuitive appeal but lacks an axiomatic foundation. Schmeidler (1989) and Gilboa (1987) provide an axiomatisation for expected utility with non-additive probabilities. This paper introduces E-capacities as a representation of beliefs which incorporates objective information about the probability of events. It can be shown that the Choquet integral of an E-capacity is (...) the Ellsberg representation. The paper further explores properties of this representation of beliefs and provides an axiomatisation for them. (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)

Persons anguished by another's profound suffering are often outraged by well-intentioned efforts to console them which suggest that God 'sent' that horrific suffering to their loved one for a 'purpose' according to a tailor-made 'plan' for just that person. However, the outraged reaction simply deepens the anguish. This book argues that such 'consolation' is theologically problematic because it assumes that unrestricted power is what makes God 'God.' Against that it outlines an account of 'who' and 'what' the Triune God is, (...) framed in terms of God's intrinsic 'glory,' the attractive and perfectly self-expressive self-giving in love that is God's life, and sets limits to the range of things we can say God 'does.' Correlatively it offers an account of different senses in which God is 'sovereign' and 'powerful', one which reflects three ways God relates to all else: to create, to bless eschatologically, and to reconcile, as is scripturally narrated. (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)

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)

We report on an experiment in which subjects choose actions in strategic games with either strategic complements or substitutes against a granny, a game theorist or other subjects. The games are selected in order to test predictions on the comparative statics of equilibrium with respect to changes in strategic ambiguity. We find that subjects face higher ambiguity while playing against the granny than playing against the game theorist if we assume that subjects are ambiguity averse. Moreover, under the same assumption, (...) subjects choose more secure actions in games more prone to ambiguity which is in line with the predictions. (shrink)