Contests with Ambiguity

David Kelsey and Tigran Melkonyan ()

No 1411, Discussion Papers from University of Exeter, Department of Economics

Abstract: The paper examines the effect of ambiguity on contests where multiple parties expend resources to win a prize. We develop a model where contenders perceive ambiguity about their opponents’ strategies and determine how perceptions of ambiguity and attitudes to ambiguity affect equilibrium choice. The paper also investigates how equilibrium under ambiguity is related to behavior where contenders have expected utility preferences. Our model can explain experimental results such as overbidding and overspreading relative to Nash predictions.

Keywords: Ambiguity; Contests; Choquet expected utility; neo-additive preferences. (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-exp, nep-mic and nep-upt
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Citations: View citations in EconPapers (1)

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https://exetereconomics.github.io/RePEc/dpapers/DP1411.pdf (application/pdf)

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Journal Article: Contests with ambiguity (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:exe:wpaper:1411

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