Two examples of ambiguity aversion
Pavlo R. Blavatskyy
Economics Letters, 2013, vol. 118, issue 1, 206-208
We consider two plausible and even natural examples of ambiguity aversion: the classical Ellsberg (1961) two-color paradox and a variant of the Machina (2009) reflection example. We extend the results of Baillon et al. (2011) and demonstrate that these two examples challenge the descriptive validity of Siniscalchi (2009) vector expected utility and the model of Nau (2006).
Keywords: Subjective uncertainty; Ambiguity; Ambiguity aversion; Ellsberg paradox; Reflection example (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:118:y:2013:i:1:p:206-208
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