Eliciting Ambiguity with Mixing Bets

Patrick Schmidt

American Economic Journal: Microeconomics, 2025, vol. 17, issue 1, 354-88

Abstract: Preferences for mixing can reveal ambiguity perception and attitude on a single event. The validity of the approach is discussed for multiple preference classes, including maxmin, maxmax, variational, and smooth second-order preferences. An experimental implementation suggests that participants perceive almost as much ambiguity for the stock index and actions of other participants as they do for the Ellsberg urn, indicating the importance of ambiguity in real-world decision-making.

JEL-codes: C72 D11 D12 D81 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1257/mic.20220370

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