The price for information about probabilities and its relation with risk and ambiguity

Theory and Decision 73 (1):125-160 (2012)
In this article, ambiguity attitude is measured through the maximum price a decision maker is willing to pay to know the probability of an event. Two problems are examined in which the decision maker faces an act: in one case, buying information implies playing a lottery, while, in the other case, buying information gives also the option to avoid playing the lottery. In both decision settings, relying on the Choquet expected utility model, we study how the decision maker’s risk and ambiguity attitudes affect the reservation price for ambiguity resolution. These effects are analyzed for different levels of ambiguity of the act. Operating instructions for the elicitation of the reservation price for ambiguity resolution in an experimental setting are provided at the end of the article.
Keywords Ambiguity aversion  Choquet expected utility  Information about probabilities  Reservation price for ambiguity resolution  Option value
Categories (categorize this paper)
DOI 10.1007/s11238-011-9271-6
 Save to my reading list
Follow the author(s)
My bibliography
Export citation
Find it on Scholar
Edit this record
Mark as duplicate
Revision history Request removal from index
Download options
PhilPapers Archive

Upload a copy of this paper     Check publisher's policy on self-archival     Papers currently archived: 23,209
External links
Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
Through your library
References found in this work BETA

Add more references

Citations of this work BETA

Add more citations

Similar books and articles

Monthly downloads

Added to index


Total downloads

60 ( #79,574 of 1,941,072 )

Recent downloads (6 months)

19 ( #34,298 of 1,941,072 )

How can I increase my downloads?

My notes
Sign in to use this feature

Start a new thread
There  are no threads in this forum
Nothing in this forum yet.