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Kindness, confusion, or … ambiguity?

Published online by Cambridge University Press:  14 March 2025

Carmela Di Mauro  and
Massimo Finocchiaro Castro
Carmela Di Mauro
Affiliation:
D.A.P.P.S.I, Università degli Studi di Catania, Catania, Italy
Massimo Finocchiaro Castro*
Affiliation:
DSSGES, Department of Historical, Legal, Economic and Social Studies, Università degli Studi Mediterranea di Reggio Calabria, via Campanella 38/A, 89125 Reggio Calabria, Italy
*
e-mail: massimo.finocchiaro@unirc.it
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Abstract

Other-regarding preferences or decision errors are the main explanations put forward to justify contributions exceeding the non-cooperative optimum in VCM games. An alternative rationale relies on ambiguity aversion. Ambiguity aversion increases the perceived marginal benefit of own contributions, which in equilibrium will exceed the Nash level. We present a series of experiments testing this hypothesis. To control for other-regarding preferences, we run a two-player game in which a human player plays with a virtual agent. Players are assigned either to a risky setting (known probabilities of opponent's choices) or to an ambiguity setting (probabilities of opponent's contribution are vague). Results show that ambiguity affects contributions. However, attitude to ambiguity appears to be affected by the location of the aggregate Nash optimum inside the decision space.

Keywords

VCMFree-ridingAmbiguityVirtual agent

JEL classification

H41: Public Goods C91: Laboratory, Individual Behavior D81: Criteria for Decision-Making under Risk and Uncertainty
Type
Original Paper
Information
Experimental Economics , Volume 14 , Issue 4 , November 2011 , pp. 611 - 633
Copyright
Copyright © 2011 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (doi: 10.1007/s10683-011-9284-6) contains supplementary material, which is available to authorized users.

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