A Variation on Ellsberg
AbstractEllsberg's experiment involved a gamble with no ambiguity (N) and a gam- ble where the prize that could be won is objectively known, but the winning probability depends on the (ambiguous) urn's composition (P). We extend this by including a gamble where the winning probability is objectively known, but the prize depends on the urn's composition (C), and also gambles where both the probability and the prize depend on the urn's composition, and can either be correlated positively (D) or negatively (M). Among transitive subjects who prefer N to P, 40% prefer D to N, 74% prefer D to P, 97% prefer D to M, and the modal ranking (about 39%) satis es D
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Bibliographic InfoPaper provided by Brown University, Department of Economics in its series Working Papers with number 2011-6.
Date of creation: 2011
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Postal: Department of Economics, Brown University, Providence, RI 02912
Ellsberg Paradox; Uncertainty Aversion; Ambiguity Aversion; MaxMin Expected Utility.;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-26 (All new papers)
- NEP-MIC-2011-02-26 (Microeconomics)
- NEP-UPT-2011-02-26 (Utility Models & Prospect Theory)
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- Simone Cerreia-Vioglio & Fabio Maccheroni & Massimo Marinacci & Luigi Montrucchio, 2011.
"Ambiguity and Robust Statistics,"
Working Papers, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University
382, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Casadesus-Masanell, Ramon & Klibanoff, Peter & Ozdenoren, Emre, 2000. "Maxmin expected utility through statewise combinations," Economics Letters, Elsevier, Elsevier, vol. 66(1), pages 49-54, January.
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