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Information Source's Reliability

Author

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  • Gérard Mondello

    (Université Côte d'Azur, France
    GREDEG CNRS)

Abstract

This paper studies the impact of unreliable information sources on the decision process under ambiguity. Using a modified Ellsberg framework, it compares two types of agents: one is a Savage expected utility maximizer and the other a Neo-Choquet-type expected utility maximizer. This comparison shows that while the former will always conform to the source of information regardless of its level of reliability, the latter will make its choice based on its levels of preference/aversion for ambiguity and its degree of optimism/pessimism. Therefore, this explains why decision-makers may choose randomly when the reliability of the information source is too low.

Suggested Citation

  • Gérard Mondello, 2022. "Information Source's Reliability," GREDEG Working Papers 2022-21, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France, revised Oct 2022.
    • Handle: RePEc:gre:wpaper:2022-21
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Uncertainty theory; decision theory; ambiguity aversion; Information;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I19 - Health, Education, and Welfare - - Health - - - Other
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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