A Dynamic Ellsberg Urn Experiment
Peter Dürsch and
No 487, Working Papers from University of Heidelberg, Department of Economics
Two rationality arguments are used to justify the link between conditional and unconditional preferences in decision theory: dynamic consistency and consequentialism. Dynamic consistency requires that ex ante contingent choices are respected by updated preferences. Consequentialism states that only those outcomes which are still possible can matter for updated preferences. We test the descriptive validity of these rationality arguments with a dynamic version of Ellsberg's three color experiment and find that subjects act more often in line with consequentialism than with dynamic consistency.
Keywords: Non expected utility preferences; ambiguity; updating; dynamic consistency; consequentialism (search for similar items in EconPapers)
JEL-codes: D81 C91 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
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Journal Article: A dynamic Ellsberg urn experiment (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:awi:wpaper:0487
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