Ambiguous information and dilation: An experiment

Denis Shishkin and Pietro Ortoleva

Journal of Economic Theory, 2023, vol. 208, issue C

Abstract: With standard models of updating under ambiguity, new information may increase the amount of relevant ambiguity: the set of beliefs may ‘dilate.’ We experimentally test one sharp case: agents bet on a risky urn and get information that is truthful or not based on the draw from an Ellsberg urn. With common models, the set of beliefs dilates, and the value of bets decreases for ambiguity-averse agents and increases for ambiguity-seeking ones. Instead, we find that the value of bets does not change for ambiguity-averse individuals, while it increases substantially for ambiguity-seeking ones. We also test bets on ambiguous urns, in which case we find sizable reactions to ambiguous information.

Keywords: Updating; Ambiguous information; Ambiguity aversion; Ellsberg paradox; Maxmin expected utility (search for similar items in EconPapers)
JEL-codes: C91 D81 D90 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022053123000066
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:208:y:2023:i:c:s0022053123000066

DOI: 10.1016/j.jet.2023.105610

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().