Dragon Slaying with Ambiguity: Theory and Experiments

Le Roux, Sara; Kelsey, David

Abstract

This paper studies the impact of ambiguity in the best shot and weakest link models of public good provision. The models are …rst analysed theoretically. Then we conduct experiments to study how ambiguity a¤ects behaviour in these games. We test whether subjects'perception of ambiguity di¤ers between a local opponent and a foreign one. We …nd that an ambiguity safe strategy, is often chosen by subjects. This is compatible with the hypothesis that ambiguity aversion in ‡uences behaviour in games. Subjects tend to choose contributions above (resp. below) the Nash equilibrium in the Best Shot (resp. Weakest Link) model.

• Journal Article Type: Article
• Acceptance Date: Dec 23, 2015
• Online Publication Date: Apr 1, 2016
• Publication Date: 2017-02
• Deposit Date: Jun 22, 2020
• Publicly Available Date: Jun 23, 2020
• Journal: Journal of Public Economic Theory
• Print ISSN: 1097-3923
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 19
• Issue: 1
• Pages: 178-197
• DOI: https://doi.org/10.1111/jpet.12185
• Keywords: Public goods; Ambiguity; Choquet expected utility; strategic complements; weakest link; best shot JEL Classi…cation: C72; C91; D03; D81; H41
• Public URL: https://nottingham-repository.worktribe.com/output/4699990
• Publisher URL: https://onlinelibrary.wiley.com/doi/epdf/10.1111/jpet.12185