In many common interactive scenarios, participants lack information about other participants, and specifically about the preferences of other participants. In this work, we model an extreme case of incomplete information, which we term games with type ambiguity, where a participant lacks even information enabling him to form a belief on the preferences of others. Under type ambiguity, one cannot analyze the scenario using the commonly used Bayesian framework, and therefore he needs to model the participants using a different decision model.
In this work, we present the ${\rm MINthenMAX}$ decision model under ambiguity. This model is a refinement of Wald's MiniMax principle, which we show to be too coarse for games with type ambiguity. We characterize ${\rm MINthenMAX}$ as the finest refinement of the MiniMax principle that satisfies three properties we claim are necessary for games with type ambiguity. This prior-less approach we present her also follows the common practice in computer science of worst-case analysis.
Finally, we define and analyze the corresponding equilibrium concept assuming all players follow ${\rm MINthenMAX}$. We demonstrate this equilibrium by applying it to two common economic scenarios: coordination games and bilateral trade. We show that in both scenarios, an equilibrium in pure strategies always exists and we analyze the equilibria.
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