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Interactive Ellsberg tasks: An experiment

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  • Dominiak, Adam
  • Duersch, Peter

Abstract

In his Ph.D.-thesis, Ellsberg formulated strong conditions under which his hypothetical tests of SEU theory have to take place – there should be no strategic interaction. Yet, in reality, situations with unknown probabilities often feature strategic interests of others, who may influence the unknown probabilities. Will decision makers see such situations as interactive or not? We construct experimental treatments where subjects make decisions under ambiguity, while also facing strategic motives of others. Payoffs form coordination or zero-sum games. At least a quarter of subjects view the situation as interactive; others behave in line with the predictions of ambiguity models.

Suggested Citation

  • Dominiak, Adam & Duersch, Peter, 2019. "Interactive Ellsberg tasks: An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 145-157.
  • Handle: RePEc:eee:jeborg:v:161:y:2019:i:c:p:145-157
    DOI: 10.1016/j.jebo.2019.03.005
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    References listed on IDEAS

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    More about this item

    Keywords

    Ambiguity; Ellsberg task; Ambiguity aversion; Ellsberg conditions; Nash equilibrium;

    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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