Ellsberg meets Keynes at an urn

Soo Hong Chew, Bin Miao and Songfa Zhong

Quantitative Economics, 2023, vol. 14, issue 3, 1133-1162

Abstract: Keynes (1921) and Ellsberg (1961) have articulated an aversion toward betting on an urn containing balls of two colors of unknown proportion to one with a 50–50 composition. Keynes views this as reflecting different preferences for bets arising from different sources of uncertainty. Ellsberg describes this as weighting the priors arising from the unknown urn pessimistically. In two experiments, we observe substantial links between attitude toward almost‐objective uncertainty and attitudes toward multiple‐prior uncertainties in terms of ambiguity and its corresponding compound risk. Our findings point to a shared component across domains of uncertainty and motivate the need for further theoretical development.

Date: 2023
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.3982/QE2253

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:wly:quante:v:14:y:2023:i:3:p:1133-1162

Ordering information: This journal article can be ordered from
https://www.econometricsociety.org/membership

Access Statistics for this article

More articles in Quantitative Economics from Econometric Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().