More Ambiguous or More Complex? An Investigation of Individual Preferences under Model Uncertainty
Ilke Aydogan (),
Loïc Berger () and
Vincent Theroude ()
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Ilke Aydogan: IESEG School of Management, Univ. Lille, CNRS, UMR 9221 - LEM - Lille Economie Management, F-59000 Lille, France; and iRisk Research Center on Risk and Uncertainty
Loïc Berger: CNRS, Univ. Lille, IESEG School of Management, UMR 9221 - LEM - Lille Economie Management, F-59000 Lille, France; iRisk Research Center on Risk and Uncertainty; RFF-CMCC European Institute on Economics and the Environment (EIEE), and Centro Euro-Mediterraneo sui Cambiamenti Climatici, Italy
Vincent Theroude: Université de Lorraine, Université de Strasbourg, CNRS, BETA, 54000, Nancy, France
Working Papers from IESEG School of Management
WeThis paper explores the drivers of individual preferences under uncertainty. We propose a characterization of the situations of model uncertainty such as the ones introduced by Ellsberg (1961) by building on the more ambiguous relations of Jewitt and Mukerji (2017) and Izhakian (2020) and on two new more complex relations. Re- considering existing data sets from the recent literature and combining them with new experimental evidence, we show that uncertainty preferences can be driven by considerations regarding both the degree of complexity and ambiguity that a situation entails.
Keywords: : Ambiguity; model uncertainty; complexity; Ellsberg paradox (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Pages: 58 pages
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Persistent link: https://EconPapers.repec.org/RePEc:ies:wpaper:e202303
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