Precise versus imprecise datasets: revisiting ambiguity attitudes in the Ellsberg paradox

Roxane Bricet

No 2018-08, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise

Abstract: Most of real-life decision problems are usually characterized by uncertainty regarding the probability distribution of outcomes. This article experimentally investigates individual’s attitude towards partial ambiguity, defined by situations where more or less precise sets of observations are available to the agents. Drawing on Ellsberg’s 2-urns experiment, I depart from the classic design and describe both urns by datasets with different degrees of precision. As a result, most subjects behave in conformity with the Expected Utility Hypothesis although a significant proportion of choices can still be interpreted as an expression of non-neutral ambiguity attitude. I calculate an individual score of ambiguity-sensitivity which suggests a significant bias towards ambiguity-aversion, but weaker than in the related literature.

Keywords: Preferences for information precision; Ambiguity; Ellsberg paradox; Experiment. (search for similar items in EconPapers)
JEL-codes: C91 D81 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-exp, nep-knm and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2018-08

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