Non-Additive Beliefs and Strategic Equilibria

Abstract This paper studies n -player games where players' beliefs about their opponents' behaviour are modelled as non-additive probabilities. The concept of an “equilibrium under uncertainty” which is introduced in this paper extends the equilibrium notion of Dow and Werlang (1994, J. Econom. Theory 64 , 305–324) to n -player games in strategic form. Existence of such an equilibrium is demonstrated under usual conditions. For low degrees of ambiguity, equilibria under uncertainty approximate Nash equilibria. At the other extreme, with a low degree of confidence, maximin equilibria appear. Finally, robustness against a lack of confidence may be viewed as a refinement for Nash equilibria. Journal of Economic Literature Classification Numbers: C72, D81.

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