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Comment on Ellsberg's two-color experiment, portfolio inertia and ambiguity

Youichiro Higashi, Sujoy Mukerji (), Norio Takeoka and Jean-Marc Tallon ()
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Youichiro Higashi: Department of economics - University of Rochester [USA]
Norio Takeoka: Department of economics - University of Rochester [USA]

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: The final step in the proof of Proposition 1 (p.311) of Mukerji and Tallon (2003) may not hold in generalbecause $\varepsilon>0$ in the proof cannot be chosen independently of $w,z$. We point out by a counterexample that the axioms they impose are too weak for Proposition 1. We introduce a modified set of axioms and re-establish the proposition

Keywords: ambiguity; bid ask spread; Ellsberg paradox (search for similar items in EconPapers)
Date: 2008-09
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Published in International Journal of Economic Theory, Wiley, 2008, 4 (3), pp.433-444. ⟨10.1111/j.1742-7363.2008.00087.x⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-00175266

DOI: 10.1111/j.1742-7363.2008.00087.x

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