Randomization and ambiguity perception

Yutaro Akita and Kensei Nakamura

Papers from arXiv.org

Abstract: Ambiguity-averse decision makers typically dislike not only the presence of ambiguous events but also their increase, contrary to what standard ambiguity models predict. We axiomatically study such a decision maker. She avoids ex ante randomization over prospects since it only increases the number of relevant ambiguous events without providing a hedge against uncertainty. Our axioms lead to a representation in which the decision maker behaves as if optimizing her ambiguity perception at a cost. We show the uniqueness of the representation, and conduct comparatives of attitudes toward ambiguity and its increase. This identification is not achieved without considering ex ante randomization.

Date: 2025-09, Revised 2026-05
New Economics Papers: this item is included in nep-dcm, nep-mic and nep-upt
References: Add references at CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2509.05076 Latest version (application/pdf)

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:arx:papers:2509.05076

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().