Career concerns and ambiguity aversion

Eric Rasmusen ()

Economics Letters, 2010, vol. 108, issue 2, 175-177

Abstract: Why do people have ambiguity aversion, preferring, a gamble with a 50% chance of success to one whose expected probability of success is 50% but where that 50% is an unbiased estimate? The answer modelled here, in the spirit of the career concerns literature, is learning: a risk-averse person does not wish observers to learn whether he is good or bad at estimating probabilities. He therefore prefers a gamble with objective probabilities.

Keywords: Ambiguity; Ellsberg; paradox; Career; concerns (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (5)

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Working Paper: Career Concerns and Ambiguity Aversion (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:108:y:2010:i:2:p:175-177

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