A Definition of Perceived Ambiguity and its Application to Games.
January, 15th 2020
Dr. Lorenz Hartmann
In a multiple prior model we introduce a measure of ambiguity which leads to ambiguity being location invariant, i.e. two prior sets reveal the same ambiguity if and only if they differ only in location. This approach generalizes and unifies many existing measures. We show that our approach allows a straightforward application to normal-form games in which players perceive ambiguity about the behaviour of the other players. We illustrate the modelling capabilities by means of intuitive examples.