Betting on Machina's reflection example: an experiment on ambiguity

L’Haridon, Olivier and Laetitia Placido ()
Authors registered in the RePEc Author Service: Olivier L'Haridon

No 909, HEC Research Papers Series from HEC Paris

Abstract: In a recent paper, Machina (2008) suggested choice problems in the spirit of Ellsberg (1961) which challenge tail-separability, an implication of Choquet Expected Utility (CEU) to a similar extent as the Ellsberg paradox challenged the sure-thing principle implied by Subjective Expected Utility (SEU). We have tested choice behavior for bets on one of Machina’s choice problems, the reflection example. Our results indicate that tail-separability is violated by a large majority of subjects (over 70% of the sample). These empirical findings complement the theoretical analysis of Machina (2008) and, together, they confirm the need for new approaches in the analysis of ambiguity for decision making.

Keywords: ambiguity; Choquet expected utility; experimental economics (search for similar items in EconPapers)
JEL-codes: C90 D81 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2008-10-01
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
References: Add references at CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Betting on Machina’s reflection example: an experiment on ambiguity (2010)
Working Paper: Betting on Machina's reflection example: an experiment on ambiguity (2010)
Working Paper: Betting on Machina's reflection example: an experiment on ambiguity (2010)
Working Paper: Betting on Machina's reflection example: an experiment on ambiguity (2010)
Working Paper: Betting on Machina's reflection example: an Experiment on Ambiguity (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:0909

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