Do individual attitudes towards imprecision survive in experimental asset markets?
Christoph Huber () and
Julia Rose ()
Working Papers from Faculty of Economics and Statistics, University of Innsbruck
In situations where both the magnitude of gains and losses as well as the probability distribution over these realizations is uncertain, imprecision is an inherent feature of decision-making. While imprecision has been shown to affect individual valuations, many decisions are made in market settings with potentially different implications. We thus examine the impact of imprecision, first, in an individual decision task, and second, in experimental asset markets-with no imprecision (risk), imprecision in probabilities (ambiguity), imprecision in outcomes, and full imprecision. We find imprecision seeking in outcomes in people's individual attitudes, but these preferences do not withstand market dynamics. Nevertheless, we observe imprecision aversion in probabilities at the end of trading, suggesting that ambiguity aversion, in contrast, prevails in experimental markets.
Keywords: imprecision attitudes; ambiguity aversion; uncertainty; asset markets; experimental finance (search for similar items in EconPapers)
JEL-codes: C92 D81 G11 G12 (search for similar items in EconPapers)
Pages: 42 pages
New Economics Papers: this item is included in nep-bec, nep-exp and nep-upt
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Working Paper: Do individual attitudes towards imprecision survive in experimental asset markets? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:inn:wpaper:2019-06
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