Non-Additive beliefs and strategic equilibria

This paper studies n-player games where players ’ beliefs about their opponents ’ behav-iour are modelled as non-additive probabilities. The concept of an ’’equilibrium under uncertainty’ ’ which is introduced in this paper extends the equilibrium notion ofDow and Werlang (1994) 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 con-fidence, maximin equilibria appear. Finally, robustness against a lack of confidence may be viewed as a refinement for Nash equilibria. JEL Classification: C72, D8