A reflection on the reflection example

Pavlo Blavatskyy

Economics Letters, 2025, vol. 247, issue C

Abstract: Machina (2009) reflection example challenges Choquet expected utility, cumulative prospect theory, and many other well-known models of ambiguity aversion. This paper shows that the reflection example can be accommodated within a modified Choquet expected utility with one capacity for relatively ambiguous events and a different capacity—for relatively unambiguous events.

Keywords: Uncertainty; Ambiguity; Ambiguity aversion; Reflection example; Choquet expected utility; Cumulative prospect theory (search for similar items in EconPapers)
JEL-codes: D89 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:247:y:2025:i:c:s0165176524006049

DOI: 10.1016/j.econlet.2024.112120

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