How Much Ambiguity Aversion? Finding Indifferences between Ellsberg's Risky and Ambiguous Bets

Journal of Risk and Uncertainty 45 (3):215-38 (2012)

Abstract

Experimental results on the Ellsberg paradox typically reveal behavior that is commonly interpreted as ambiguity aversion. The experiments reported in the current paper find the objective probabilities for drawing a red ball that make subjects indifferent between various risky and uncertain Ellsberg bets. They allow us to examine the predictive power of alternative principles of choice under uncertainty, including the objective maximin and Hurwicz criteria, the sure-thing principle, and the principle of insufficient reason. Contrary to our expectations, the principle of insufficient reason performed substantially better than rival theories in our experiment, with ambiguity aversion appearing only as a secondary phenomenon.

Download options

PhilArchive

External links

Setup an account with your affiliations in order to access resources via your University's proxy server

Through your library

Analytics

Added to PP
2012-10-18

Downloads
747 (#10,370)

6 months
40 (#21,499)

Historical graph of downloads
How can I increase my downloads?

References found in this work

The Foundations of Statistics.Leonard J. Savage - 1954 - Wiley Publications in Statistics.
The Foundations of Statistics.Leonard J. Savage - 1956 - Philosophy of Science 23 (2):166-166.
The Foundations of Statistics.Leonard J. Savage - 1959 - Synthese 11 (1):86-89.
Rational Decisions.Ken Binmore - 2009 - Princeton University Press.

View all 13 references / Add more references

Citations of this work

What Is Risk Aversion?H. Orri Stefansson & Richard Bradley - 2019 - British Journal for the Philosophy of Science 70 (1):77-102.
Qual a motivação para se defender uma teoria causal da memória?César Schirmer Dos Santos - 2018 - In Juliano Santos do Carmo & Rogério F. Saucedo Corrêa (eds.), Linguagem e cognição. Pelotas: NEPFil. pp. 63-89.

View all 8 citations / Add more citations

Similar books and articles