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Information source’s reliability

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  • Gerard Mondello

    (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur)

Abstract

This paper studies the impact of unreliable information sources on the decision process under ambiguity. Using a modified Ellsberg framework, it compares two types of agents: one is a Savage expected utility maximizer and the other a Neo-Choquet-type expected utility maximizer. This comparison shows that while the former will always conform to the source of information regardless of its level of reliability, the latter will make its choice based on its levels of preference/aversion for ambiguity and its degree of optimism/pessimism. Therefore, this explains why decision-makers may choose randomly when the reliability of the information source is too low.
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Suggested Citation

  • Gerard Mondello, 2023. "Information source’s reliability," Working Papers hal-03926562, HAL.
    • Handle: RePEc:hal:wpaper:hal-03926562
    Note: View the original document on HAL open archive server: https://hal.science/hal-03926562
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I19 - Health, Education, and Welfare - - Health - - - Other
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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