Ambiguous games: Evidence for strategic ambiguity aversion

Abstract

The problem of ambiguity in games is discussed, and a class of ambiguous games is identified. A total of 195 participants played strategic-form games of various sizes with unidentified co-players. In each case, they first chose between a known-risk game involving a co-player indifferent between strategies and an equivalent ambiguous game involving one of several co-player types, each with a different dominant strategy, and then they chose a strategy for the preferred game. Half the players knew that the ambiguous co-player types were equally likely, and half did not. Half expected the outcomes to be known immediately, and half expected a week's delay. Known-risk games were generally preferred, confirming a significant strategic ambiguity aversion effect. In the delay conditions, players who knew that the ambiguous co-player types were equally likely were significantly less ambiguity averse than those who did not. Decision confidence was significantly higher in 2 × 2 than in larger games.

This project was supported by Grant RES–000–23–0154 from the Economic and Social Research Council of the UK. The authors would like to thank Clare Davies for help with data collection and David Kelsey for comments on an earlier version of the article.