Ambiguity Aversion with Three or More Outcomes
Mark Machina ()
American Economic Review, 2014, vol. 104, issue 12, 3814-40
Ambiguous choice problems which involve three or more outcome values can reveal aspects of ambiguity and ambiguity aversion which cannot be displayed in the classic two-outcome Ellsberg urn problems, and hence are not always captured by models designed to accommodate them. These aspects include Allais-type preferences over purely subjective acts, attitudes toward different sources involving different amounts of ambiguity, and attitudes toward ambiguity at different outcome levels. This paper presents a few such examples, and examines the standard models' predictions and performance in such cases. (JEL D81)
JEL-codes: D81 (search for similar items in EconPapers)
Note: DOI: 10.1257/aer.104.12.3814
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