 Is ambiguity aversion a preference? Ambiguity aversion without asymmetric informationDaniel L. Chen Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2024, vol. 111, issue C Abstract: Ambiguity aversion is the interpretation of the experimental finding (the Ellsberg paradox) that most subjects prefer betting on events whose probabilities are known (objective) to betting on events whose probabilities are unknown (subjective). However in typical experiments these unknown probabilities are known by others. Thus the typical Ellsberg experiment is a situation of asymmetric information. People may try to avoid situations where they are the less informed party, which is normatively appropriate. We find that eliminating asymmetric information in the Ellsberg experiment while leaving ambiguity in place, makes subjects prefer the ambiguous bet over the objective one, reversing the prior results. Keywords: Uncertainty aversion; Probabilistic sophistication; Sources of ambiguity; Ellsberg paradox (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:111:y:2024:i:c:s2214804324000569 DOI: 10.1016/j.socec.2024.102218 Access Statistics for this article Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) is currently edited by Pablo Brañas Garza More articles in Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) from Elsevier |
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