IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-05112675.html
   My bibliography  Save this paper

A Bayesian hierarchical model of Ellsberg-type preferences

Author

Listed:
  • Mateus Joffily

    (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - EM - EMLyon Business School - CNRS - Centre National de la Recherche Scientifique)

  • Thijs van de Laar

    (Department of Electrical Engineering - TU/e - Eindhoven University of Technology [Eindhoven])

Abstract

We consider a Bayesian hierarchical model of Ellsberg-type preferences based on conditional subjective expected utility. In our model, optimism and pessimism emanate from motivated prior beliefs about unobserved outcomes. This implies that optimism and pessimism can only propagate along the structure of the hierarchical model when the probability of outcomes is unknown (ambiguity) rather than known (risk). We show that the prevailing preferences observed in Ellsberg (1961)'s two-urn experiment and Jabarian and Lazarus (2023)'s two-ball experiment are reproduced by our model when motivated priors are pessimistic.

Suggested Citation

  • Mateus Joffily & Thijs van de Laar, 2025. "A Bayesian hierarchical model of Ellsberg-type preferences," Working Papers hal-05112675, HAL.
    • Handle: RePEc:hal:wpaper:hal-05112675
    Note: View the original document on HAL open archive server: https://hal.science/hal-05112675v1
    as

    Download full text from publisher

    File URL: https://hal.science/hal-05112675v1/document
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-05112675. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.