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A Bayesian Approach to Uncertainty Aversion Author info | Abstract | Publisher info | Download info | Related research | Statistics Yoram Halevy
Vincent Feltkamp
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The Ellsberg paradox demonstrates that people's beliefs over uncertain events might not be representable by subjective probability. We show that if a risk averse decision maker, who has a well defined Bayesian prior, perceives an Ellsberg type decision problem as possibly composed of a bundle of several positively correlated problems, she will be uncertainty averse. We generalize this argument and derive sufficient conditions for uncertainty aversion. Copyright The Review of Economic Studies Limited, 2005.
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Article provided by Blackwell Publishing in its journal Review of Economic Studies .
Volume (Year): 72 (2005)
Issue (Month): 2 (04)
Pages: 449-466
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Handle: RePEc:bla:restud:v:72:y:2005:i:2:p:449-466Contact details of provider: Web page: http://www.blackwellpublishing.com/journal.asp?ref=0034-6527
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Paper Vincent Feltkamp & Yoram Halevy, 1999.
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1999-14, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
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