EconPapers    
Economics at your fingertips  
 

A Bayesian Approach to Uncertainty Aversion

Vincent Feltkamp and Yoram Halevy ()

Microeconomics.ca working papers from Vancouver School of Economics

Abstract: The Ellsberg Paradox demonstrates that people's belief over uncertain events might not be representable by subjective probability. We show that if a risk averse decision maker, who has a well defined Bayesian prior, perceives an Ellsberg type decision problem as possibly composed of a bundle of several positively correlated problems - she will be uncertainty averse. We generalize this argument and derive sufficient conditions for uncertainty aversion.

Keywords: Ellsberg Paradox; rule rationality; ambiguity aversion; risk aversionm subjective probability; reduction of compound lotteries (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Pages: 0 pages
Date: 2004-02-13, Revised 2014-02-25
New Economics Papers: this item is included in nep-mic and nep-rmg
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://faculty.arts.ubc.ca/yhalevy/HalevyFeltkampRES2005.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Journal Article: A Bayesian Approach to Uncertainty Aversion (2005) Downloads
Working Paper: A Bayesian Approach to Uncertainty Aversion (2000) Downloads
Working Paper: - A BAYESIAN APPROACH TO UNCERTAINTY AVERSION (1999) Downloads
Working Paper: A Bayesian Approach to Uncentainty Aversion Downloads
Working Paper: A Bayesian Approach to Uncentainty Aversion Downloads
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:ubc:pmicro:halevy-04-02-13-07-48-37

Access Statistics for this paper

More papers in Microeconomics.ca working papers from Vancouver School of Economics
Bibliographic data for series maintained by Maureen Chin ().

 
Page updated 2022-09-29
Handle: RePEc:ubc:pmicro:halevy-04-02-13-07-48-37