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A reflection on the reflection example

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  • Blavatskyy, Pavlo

Abstract

Machina (2009) reflection example challenges Choquet expected utility, cumulative prospect theory, and many other well-known models of ambiguity aversion. This paper shows that the reflection example can be accommodated within a modified Choquet expected utility with one capacity for relatively ambiguous events and a different capacity—for relatively unambiguous events.

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  • Blavatskyy, Pavlo, 2025. "A reflection on the reflection example," Economics Letters, Elsevier, vol. 247(C).
    • Handle: RePEc:eee:ecolet:v:247:y:2025:i:c:s0165176524006049
    DOI: 10.1016/j.econlet.2024.112120
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    References listed on IDEAS

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    JEL classification:

    • D89 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Other

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