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Off the Charts: Massive Unexplained Heterogeneity in a Global Study of Ambiguity Attitudes

Author

Listed:
  • Olivier l’Haridon

    (University of Rennes)

  • Ferdinand M. Vieider

    (University of Reading)

  • Diego Aycinena

    (Universidad del Rosario)

  • Agustinus Bandur

    (Bina Nusantara University)

  • Alexis Belianin

    (Higher School of Economics)

  • Lubomír Cingl

    (University of Economics)

  • Amit Kothiyal

    (Max Planck Institute for Human Development)

  • Peter Martinsson

    (University of Gothenburg and Linköping University)

Abstract

Ambiguity attitudes have been prominently used in economic models, but we still know little about their demographic correlates or their generalizability beyond the West. We analyze the ambiguity attitudes of almost 3,000 students across thirty countries. For gains, we find ambiguity aversion everywhere, while ambiguity aversion is much weaker for losses. Ambiguity attitudes change systematically with probabilities for both gains and losses. Much of the between-country variation can be explained through a few macroeconomic characteristics. In contrast, we find massive unexplained variation at the individual level. We also find much unexplained heterogeneity in individual responses to different decision tasks.

Suggested Citation

  • Olivier l’Haridon & Ferdinand M. Vieider & Diego Aycinena & Agustinus Bandur & Alexis Belianin & Lubomír Cingl & Amit Kothiyal & Peter Martinsson, 2018. "Off the Charts: Massive Unexplained Heterogeneity in a Global Study of Ambiguity Attitudes," The Review of Economics and Statistics, MIT Press, vol. 100(4), pages 664-677, October.
    • Handle: RePEc:tpr:restat:v:100:y:2018:i:4:p:664-677
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    Cited by:

    1. Ilke AYDOGAN & Loïc BERGER & Valentina BOSETTI, 2023. "Unraveling Ambiguity Aversion," Working Papers 2023-iRisk-01, IESEG School of Management.
    2. Baillon, Aurélien & Bleichrodt, Han & Li, Chen & Wakker, Peter P., 2021. "Belief hedges: Measuring ambiguity for all events and all models," Journal of Economic Theory, Elsevier, vol. 198(C).
    3. Carlsson, Fredrik & Lampi, Elina & Martinsson, Peter & Tu, Qin & Yang, Xiaojun, 2018. "Long-run effects of family policies: An experimental study of the Chinese one-child policy," Working Papers in Economics 732, University of Gothenburg, Department of Economics.
    4. Ilke Aydogan & Loïc Berger & Valentina Bosetti, 2023. "Unraveling Ambiguity Aversion," Post-Print hal-04071242, HAL.
    5. Li, Chen & Turmunkh, Uyanga & Wakker, Peter P., 2020. "Social and strategic ambiguity versus betrayal aversion," Games and Economic Behavior, Elsevier, vol. 123(C), pages 272-287.
    6. Watanabe, Masahide & Fujimi, Toshio, 2022. "Ambiguity of scientific probability predictions and willingness-to-pay for climate change mitigation policies," Research in Economics, Elsevier, vol. 76(4), pages 386-402.
    7. Victor H. Gonzalez-Jimenez, 2019. "Contracting Probability Distortions," Vienna Economics Papers vie1901, University of Vienna, Department of Economics.
    8. Ranoua Bouchouicha & Lachlan Deer & Ashraf Galal Eid & Peter McGee & Daniel Schoch & Hrvoje Stojic & Jolanda Ygosse-Battisti & Ferdinand M. Vieider, 2019. "Gender effects for loss aversion: Yes, no, maybe?," Journal of Risk and Uncertainty, Springer, vol. 59(2), pages 171-184, October.
    9. Ilke Aydogan & Loïc Berger & Valentina Bosetti, 2023. "Unraveling Ambiguity Aversion," Working Papers hal-04071242, HAL.
    10. Víctor González-Jiménez, 2021. "Incentive contracts when agents distort probabilities," Vienna Economics Papers vie2101, University of Vienna, Department of Economics.
    11. Biener, Christian & Landmann, Andreas & Santana, Maria Isabel, 2019. "Contract nonperformance risk and uncertainty in insurance markets," Journal of Public Economics, Elsevier, vol. 175(C), pages 65-83.
    12. Victor H. Gonzalez-Jimenez, 2019. "Contracting Probability Distortions," Vienna Economics Papers 1901, University of Vienna, Department of Economics.
    13. Aljoscha Minnich & Hauke Roggenkamp & Andreas Lange, 2023. "Ambiguity Attitudes and Surprises: Experimental Evidence on Communicating New Information within a Large Population Sample," CESifo Working Paper Series 10783, CESifo.
    14. Víctor González-Jiménez, 2021. "Incentive contracts when agents distort probabilities," Vienna Economics Papers 2101, University of Vienna, Department of Economics.

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