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A Dynamic Ellsberg Urn Experiment

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  • Lefort, Jean-Philippe
  • Dominiak, Adam
  • Dürsch, Peter

Abstract

Two rationality arguments are used to justify the link between conditional and unconditional preferences in decision theory : dynamic consistency and consequentialism. Dynamic consistency requires that ex ante contingent choices are respected by up dated preferences. Consequentialism states that only those outcomes which are still possible can matter for up dated preferences. We test the descriptive validity of these rationality arguments with a dynamic version of Ellsberg's three color experiment and that subjects act more often in line with consequentialism than with dynamic consistency.

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Bibliographic Info

Paper provided by Université Paris-Dauphine in its series Open Access publications from Université Paris-Dauphine with number urn:hdl:123456789/7357.

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Date of creation: Jan 2012
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Publication status: Published in Games and Economic Behavior (2012-01) v., p.-
Handle: RePEc:ner:dauphi:urn:hdl:123456789/7357

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Keywords: experiment; consequentialism; dynamic consistency; updating; ambiguity; Non expected utility preferences;

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Cited by:
  1. Dominiak, Adam & Lefort, Jean-Philippe, 2009. "Unambiguous Events and Dynamic Choquet Preferences," Working Papers 0489, University of Heidelberg, Department of Economics.
  2. Eichberger, Jürgen & Oechssler, Jörg & Schnedler, Wendelin, 2012. "How do people cope with an ambiguous situation when it becomes even more ambiguous?," Working Papers 0528, University of Heidelberg, Department of Economics.
  3. Carvalho, M., 2012. "Static vs Dynamic Auctions with Ambiguity Averse Bidders," Discussion Paper 2012-022, Tilburg University, Center for Economic Research.
  4. Paul Viefers, 2012. "Should I Stay or Should I Go?: A Laboratory Analysis of Investment Opportunities under Ambiguity," Discussion Papers of DIW Berlin 1228, DIW Berlin, German Institute for Economic Research.

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