Research
Research
Feedback Design in Games with Ambiguity-Averse Players with Frédéric Koessler (Journal of Economic Theory, 2025)
Former version with online appendix
We use a notion of maxmin self-confirming equilibrium (MSCE) to study the design of players’ information feedback about others’ behavior in simultaneous-move games with ambiguity-averse players. Coarse feedback shapes strategic uncertainty and can, therefore, modify players’ equilibrium strategies in an advantageous way. We characterize MSCE and study the equilibrium implications of coarse feedback in various classes of games. We show how feedback should be optimally designed to improve contributions in generalized volunteer dilemmas and public good games with strategic substitutes, strategic complements, or more general production functions. We also study games with negative externalities and strategic substitutes, such as Cournot oligopolies. In general, perfect and no feedback is suboptimal. Some results are extended to α-maxmin preferences.
Dynamic Consistency in Incomplete Information Games with Multiple Priors (Games and Economic Behavior, 2022)
working paper | online appendix
This paper explores multi-stage incomplete information games with common ambiguous information about states or types and ambiguity averse players. We characterize a belief formation process that allows players to take their knowledge about the structure of the game into account. This process leads to subjective rectangular ex-ante belief sets for all players. We show that given these sets of beliefs, players behave dynamically consistently. Therefore, using our belief formation process, we can extend the concept of sequential equilibria to multi-stage ambiguous incomplete information games. Furthermore, we characterize assumptions under which sequential rationality implies rectangularity.
Dynamic Consistency and Ambiguous Communication
(Former title: Dynamic Consistency in Ambiguous Persuasion)
In most models of ambiguous communication, a Sender can only benefit from ambiguous language if the Receiver behaves dynamically inconsistently. A dynamically inconsistent Receiver might not follow his ex-ante optimal plan after observing an ambiguous message. This paper proposes a novel approach to analyze ambiguous communication by studying dynamically consistent behavior in games with ambiguous strategies. I show that gains from ambiguous communication can be maintained even if players behave dynamically consistently. To achieve this, I define rectangularity, a condition on beliefs that ensures dynamically consistent behavior, for settings where ambiguity arises due to ambiguous strategies. Then, I analyze a Perfect Bayesian Equilibrium in an ambiguous persuasion setting. In this equilibrium, ambiguous communication outperforms standard Bayesian communication even if the Receiver behaves dynamically consistently. Finally, I extend my analysis to settings with ambiguous communication in cheap talk and mechanism design.
You can find the slides of my presentation at the 6th World Congress of the Game Theory Society here.
Dynamic Consistency in Ambiguous Dutch Auctions
We study a decreasing price auction with an ambiguity-neutral seller and two ambiguity-averse buyers. Due to the dynamic structure, buyers learn about the valuation of the opponent buyer during the auction. We characterize a belief formation process that allows buyers to consider their knowledge of the information structure. This process leads to a rectangular ex-ante belief set and implies dynamically consistent behavior. Then, we show that the seller can extract almost all surplus even if buyers behave dynamically consistently. Further, in our setting, buyers accept higher prices compared to a consistent planning approach
Knightian Equilibria in Activism Games (with Dominik Karos)