Generating Ambiguity in the Laboratory
AbstractThis article develops a method for drawing samples from a distribution with no finite quantiles or moments. The method provides researchers with a way to give subjects the experience of ambiguity. In any experiment, learning the distribution from experience is impossible for the subjects, essentially because it is impossible for the experimenter. We characterize our method, illustrate it in simulations, and then test it in a laboratory experiment. Our method does not withhold sampling information, does not assume that the subject is incapable of making statistical inferences, is replicable across experiments, and requires no special apparatus. We compare our method to the techniques used in related experiments that attempt to produce an ambiguous experience for the subjects. This paper was accepted by Peter Wakker, decision analysis.
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Bibliographic InfoArticle provided by INFORMS in its journal Management Science.
Volume (Year): 57 (2011)
Issue (Month): 4 (April)
ambiguity; Ellsberg; Knightian uncertainty; laboratory experiments; decision analysis; theory;
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- Takashi Hayashi & Ryoko Wada, 2010. "Choice with imprecise information: an experimental approach," Theory and Decision, Springer, vol. 69(3), pages 355-373, September.
- John Dickhaut & Radhika Lunawat & Kira Pronin & Jack Stecher, 2011.
"Decision making and trade without probabilities,"
Springer, vol. 48(2), pages 275-288, October.
- Yang, Chun-Lei & Yao, Lan, 2011. "Ellsberg Paradox and Second-order Preference Theories on Ambiguity: Some New Experimental Evidence," MPRA Paper 28531, University Library of Munich, Germany.
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