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Precise versus imprecise datasets: revisiting ambiguity attitudes in the Ellsberg paradox

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  • Roxane Bricet

    (Université de Cergy-Pontoise, THEMA)

Abstract

Most of real-life decision problems are usually characterized by uncertainty regarding the probability distribution of outcomes. This article experimentally investigates individual’s attitude towards partial ambiguity, defined by situations where more or less precise sets of observations are available to the agents. Drawing on Ellsberg’s 2-urns experiment, I depart from the classic design and describe both urns by datasets with different degrees of precision. As a result, most subjects behave in conformity with the Expected Utility Hypothesis although a significant proportion of choices can still be interpreted as an expression of non-neutral ambiguity attitude. I calculate an individual score of ambiguity-sensitivity which suggests a significant bias towards ambiguity-aversion, but weaker than in the related literature.

Suggested Citation

  • Roxane Bricet, 2018. "Precise versus imprecise datasets: revisiting ambiguity attitudes in the Ellsberg paradox," THEMA Working Papers 2018-08, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    • Handle: RePEc:ema:worpap:2018-08
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    References listed on IDEAS

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    More about this item

    Keywords

    Preferences for information precision; Ambiguity; Ellsberg paradox; 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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