Ambiguity seeking as a result of the status quo bias
AbstractSeveral factors affect attitudes toward ambiguity. What happens, however, when people are asked to exchange an ambiguous alternative in their possession for an unambiguous one? We present three experiments in which individuals preferred to retain the former. This status quo bias emerged both within- and between-subjects, with and without incentives, with different outcome distributions, and with endowments determined by both the experimenter and the participants themselves. Findings emphasize the need to account for the frames of reference under which evaluations of probabilistic information take place as well as modifications that should be incorporated into descriptive models of decision making. Copyright Springer Science + Business Media, LLC 2006
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal Journal of Risk and Uncertainty.
Volume (Year): 32 (2006)
Issue (Month): 3 (May)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100299
Ambiguity; Risk; Status quo bias; Decision making; Uncertainty;
Other versions of this item:
- Mercè Roca & Robin Hogarth & A. John Maule, 2005. "Ambiguity seeking as a result of the status quo bias," Economics Working Papers 882, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 2006.
- 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
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.:
- Eisenberger, Roselies & Weber, Martin, 1995. "Willingness-to-Pay and Willingness-to-Accept for Risky and Ambiguous Lotteries," Journal of Risk and Uncertainty, Springer, vol. 10(3), pages 223-33, May.
- Kip Smith & John Dickhaut & Kevin McCabe & José V. Pardo, 2002. "Neuronal Substrates for Choice Under Ambiguity, Risk, Gains, and Losses," Management Science, INFORMS, vol. 48(6), pages 711-718, June.
- Fox, Craig R & Tversky, Amos, 1995. "Ambiguity Aversion and Comparative Ignorance," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 585-603, August.
- Mukerji, Sujoy & Tallon, Jean-Marc, 2001.
"Ambiguity Aversion and Incompleteness of Financial Markets,"
Review of Economic Studies,
Wiley Blackwell, vol. 68(4), pages 883-904, October.
- Sujoy Mukerji & Jean-Marc Tallon, 2000. "Ambiguity Aversion and Incompleteness of Financial Markets," Economics Series Working Papers 46, University of Oxford, Department of Economics.
- Mukerji, S. & Tallon, J.-M., 1999. "Ambiguity Aversion and Incompleteness of Financial Markets," Papiers d'Economie MathÃÂ©matique et Applications 1999-28, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Einhorn, Hillel J & Hogarth, Robin M, 1986. "Decision Making under Ambiguity," The Journal of Business, University of Chicago Press, vol. 59(4), pages S225-50, October.
- Camerer, Colin F. & Hogarth, Robin M., 1999.
"The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework,"
1059, California Institute of Technology, Division of the Humanities and Social Sciences.
- Camerer, Colin F & Hogarth, Robin M, 1999. "The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 7-42, December.
- Samuelson, William & Zeckhauser, Richard, 1988. " Status Quo Bias in Decision Making," Journal of Risk and Uncertainty, Springer, vol. 1(1), pages 7-59, March.
- Heath, Chip & Tversky, Amos, 1991. " Preference and Belief: Ambiguity and Competence in Choice under Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 4(1), pages 5-28, January.
- Amos Tversky & Daniel Kahneman, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Levine's Working Paper Archive
7656, David K. Levine.
- Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March.
- Camerer, Colin & Weber, Martin, 1992. " Recent Developments in Modeling Preferences: Uncertainty and Ambiguity," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 325-70, October.
- Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages S251-78, October.
- Daniel Kahneman & Jack L. Knetsch & Richard H. Thaler, 1991. "Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 193-206, Winter.
- Sujoy Mukerji & Jean-Marc Tallon, 2001. "Ambiguity Aversion and Incompleteness of Financial Markets," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00174539, HAL.
- Chow, Clare Chua & Sarin, Rakesh K, 2001. " Comparative Ignorance and the Ellsberg Paradox," Journal of Risk and Uncertainty, Springer, vol. 22(2), pages 129-39, March.
- repec:hal:journl:halshs-00174539 is not listed on IDEAS
- Tversky, Amos & Kahneman, Daniel, 1992. " Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
- Curley, Shawn P. & Yates, J. Frank & Abrams, Richard A., 1986. "Psychological sources of ambiguity avoidance," Organizational Behavior and Human Decision Processes, Elsevier, vol. 38(2), pages 230-256, October.
- W. Kip Viscusi & Wesley A. Magat & Joel Huber, 1987. "An Investigation of the Rationality of Consumer Valuations of Multiple Health Risks," RAND Journal of Economics, The RAND Corporation, vol. 18(4), pages 465-479, Winter.
- Akay, Alpaslan & Martinsson, Peter & Medhin, Haileselassie & Trautmann, Stefan, 2010.
"Attitudes Toward Uncertainty Among the Poor: Evidence from Rural Ethiopia,"
dp-10-04-efd, Resources For the Future.
- Akay, Alpaslan & Martinsson, Peter & Medhin, Haileselassie & Trautmann, Stefan T., 2009. "Attitudes toward Uncertainty among the Poor: Evidence from Rural Ethiopia," IZA Discussion Papers 4225, Institute for the Study of Labor (IZA).
- Pech, Wesley & Milan, Marcelo, 2009. "Behavioral economics and the economics of Keynes," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(6), pages 891-902, December.
- Roca, Mercè & Maule, A. John, 2009. "The effects of endowment on the demand for probabilistic information," Organizational Behavior and Human Decision Processes, Elsevier, vol. 109(1), pages 56-66, May.
- L. Robin Keller & Rakesh K. Sarin & Jayavel Sounderpandian, 2007. "An examination of ambiguity aversion: Are two heads better than one?," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 2, pages 390-397, December.
- Ortoleva, Pietro, 2010.
"Status quo bias, multiple priors and uncertainty aversion,"
Games and Economic Behavior,
Elsevier, vol. 69(2), pages 411-424, July.
- Ortoleva, Pietro, 2008. "Status Quo Bias, Multiple Priors and Uncertainty Aversion," MPRA Paper 12243, University Library of Munich, Germany.
- Aurélien Baillon & Laure Cabantous & Peter Wakker, 2012. "Aggregating imprecise or conflicting beliefs: An experimental investigation using modern ambiguity theories," Journal of Risk and Uncertainty, Springer, vol. 44(2), pages 115-147, April.
- Daniele Pennesi, 2013. "Endogenous Status Quo," Carlo Alberto Notebooks 314, Collegio Carlo Alberto.
- Anat Bracha & Donald J. Brown, 2010. "Affective Decision-Making: A Theory of Optimism-Bias," Cowles Foundation Discussion Papers 1759, Cowles Foundation for Research in Economics, Yale University.
- Anat Bracha & Donald J. Brown, 2007. "Affective Decision Making: A Behavioral Theory of Choice," Cowles Foundation Discussion Papers 1633R, Cowles Foundation for Research in Economics, Yale University, revised Apr 2009.
- Stefan T. Trautmann & Ulrich Schmidt, 2011. "Pricing risk and ambiguity: The effect of perspective taking," Kiel Working Papers 1727, Kiel Institute for the World Economy.
- Arthur Snow, 2010. "Ambiguity and the value of information," Journal of Risk and Uncertainty, Springer, vol. 40(2), pages 133-145, April.
- Alpaslan Akay & Peter Martinsson & Haileselassie Medhin & Stefan Trautmann, 2012. "Attitudes toward uncertainty among the poor: an experiment in rural Ethiopia," Theory and Decision, Springer, vol. 73(3), pages 453-464, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.