Dragon slaying with ambiguity: theory and experiments

Abstract

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