Uncertainty, Ambiguity and Risk Taking: an experimental investigation of consumer behavior and demand for insurance

Jean Desrochers and J. Francois Outreville ()

ICER Working Papers from ICER - International Centre for Economic Research

Abstract: The purpose of this paper is to examine whether people treat all forms of uncertainty in the same way. Studies investigating known-risk gambles and ambiguous gambles have systematically used the urn context. Little systematic research has investigated differences in expressed attitude as a function of the manner in which vague probability information is communicated to a decision maker. The experiments reported in this paper examine the behavior of people when faced with different situations with and without an insurance context: a risky situation (the probability of loss is known), an uncertain situation (there is no prior information on the probability of loss) or an ambiguous (the information provided is vague).

Keywords: Risk behavior; ambiguity aversion; insurance purchase (search for similar items in EconPapers)
JEL-codes: C90 D81 D83 G22 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2013-11
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:icr:wpicer:10-2013

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