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Ellsberg's urns, ambiguity, measures of uncertainty and non-additivity: some experimental evidence

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  • J. L. Ford
  • Sudip Ghose

Abstract

The principal objective of the experiment reported on in this paper was to ascertain what measures of uncertainty the subjects deemed to be relevant in situations of ambiguity regarding outcomes. This permitted an assessment of non-additivity of probabilities and subjects' choices were then analysed in terms of expected utility theory and the decision theories of Shackle and Ford. In addition, a comparison of the findings on the choices of gamble that the subjects made could be effected with those made in Ellsberg's pioneering inquiry.

Suggested Citation

  • J. L. Ford & Sudip Ghose, 1998. "Ellsberg's urns, ambiguity, measures of uncertainty and non-additivity: some experimental evidence," Applied Economics Letters, Taylor & Francis Journals, vol. 5(3), pages 147-151.
    • Handle: RePEc:taf:apeclt:v:5:y:1998:i:3:p:147-151
    DOI: 10.1080/758521371
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    References listed on IDEAS

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    1. Schmeidler, David, 1989. "Subjective Probability and Expected Utility without Additivity," Econometrica, Econometric Society, vol. 57(3), pages 571-587, May.
    2. Viscusi, W Kip, 1989. "Prospective Reference Theory: Toward an Explanation of the Paradoxes," Journal of Risk and Uncertainty, Springer, vol. 2(3), pages 235-263, September.
    3. Camerer, Colin & Weber, Martin, 1992. "Recent Developments in Modeling Preferences: Uncertainty and Ambiguity," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 325-370, October.
    4. J. L. Ford, 1987. "Economic Choice Under Uncertainty," Books, Edward Elgar Publishing, number 170, June.
    5. Daniel Ellsberg, 1961. "Risk, Ambiguity, and the Savage Axioms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 75(4), pages 643-669.
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