The evolution of ambiguous beliefs

Abstract Ambiguity, in the decision-theoretic sense, means that agents are unable to identify unique probabilities for some events that they care about. Ambiguity characterizes many real-life situations, but many important questions surrounding it are still open. Descriptively, we know that people typically perceive and are sensitive to ambiguity in certain kinds of situations. Intuitively, this is well justified. Normatively, however, many think that ambiguous beliefs and ambiguity sensitivity are irrational. This raises questions such as: Why are people sensitive to ambiguity? Does it lead to inferior decisions, in particular given people’s usual decision environments? An interesting clue is that there are many examples of social contexts in which ambiguity benefits everyone involved. Hence, we investigate the possibility that ambiguity sensitivity is ‘ecologically rational’ or adaptive in a multi-agent, strategic setting. We explore the viability of ambiguity sensitive behaviour using evolutionary simulations. Our results indicate that ambiguity sensitivity can be adaptive in strategic contexts, and is especially beneficial when agents have to coordinate.