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A dynamic Ellsberg urn experiment

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  • Dominiak, Adam
  • Duersch, Peter
  • Lefort, Jean-Philippe

Abstract

Many theories of updating under ambiguity assume either dynamic consistency or consequentialism to underpin behaviorally the link between conditional and unconditional preferences. To test the descriptive validity of these rationality concepts, we conduct a dynamic extension of Ellsbergʼs 3-color experiment. We find that more subjects act in line with consequentialism than with dynamic consistency and that this result is even stronger among ambiguity averse subjects.

Suggested Citation

  • Dominiak, Adam & Duersch, Peter & Lefort, Jean-Philippe, 2012. "A dynamic Ellsberg urn experiment," Games and Economic Behavior, Elsevier, vol. 75(2), pages 625-638.
    • Handle: RePEc:eee:gamebe:v:75:y:2012:i:2:p:625-638
    DOI: 10.1016/j.geb.2012.01.002
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    More about this item

    Keywords

    Non-expected utility preferences; Ambiguity; Updating; Dynamic consistency; Consequentialism; Experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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