Revealed Preferences for Risk and Ambiguity

Donald J. Brown (), Chandra Erdman, Kirsten Ling and Laurie Santos
Additional contact information
Donald J. Brown: Department of Economics, Yale University, https://economics.yale.edu/people/emeritus/donald-j-brown
Chandra Erdman: U.S. Bureau of the Census
Kirsten Ling: Office of the Controller of the Currency
Laurie Santos: Department of Psychology, Yale University

No 1774, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We replicate the essentials of the Huettel et al. (2006) experiment on choice under uncertainty with 30 Yale undergraduates, where subjects make 200 pair-wise choices between risky and ambiguous lotteries. Inferences about the independence of economic preferences for risk and ambiguity are derived from estimation of a mixed logit model, where the choice probabilities are functions of two random effects: the proxies for risk-aversion and ambiguity-aversion. Our principal empirical finding is that we cannot reject the null hypothesis that risk and ambiguity are independent in economic choice under uncertainty. This finding is consistent with the hypothesized independence of the neural mechanisms governing economic choices under risk and ambiguity, suggested by the double dissociation-fMRI study reported in Huettel et al.

Keywords: Mixed logit; Risk-aversion; Ambiguity-aversion (search for similar items in EconPapers)
JEL-codes: C14 C25 C91 D03 D81 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2010-11
New Economics Papers: this item is included in nep-dcm, nep-exp, nep-neu and nep-upt
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cowles.yale.edu/sites/default/files/files/pub/d17/d1774.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

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:cwl:cwldpp:1774

Ordering information: This working paper can be ordered from
Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
The price is None.

Access Statistics for this paper

More papers in Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University Yale University, Box 208281, New Haven, CT 06520-8281 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Brittany Ladd ().