Two examples of ambiguity aversion
AbstractWe consider two plausible and even natural examples of ambiguity aversion: the classical Ellsberg (1961) two-color paradox and a variant of the Machina (2009) reflection example. We extend the results of Baillon et al. (2011) and demonstrate that these two examples challenge the descriptive validity of Siniscalchi (2009) vector expected utility and the model of Nau (2006).
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 118 (2013)
Issue (Month): 1 ()
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Subjective uncertainty; Ambiguity; Ambiguity aversion; Ellsberg paradox; Reflection example;
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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