Recent developments in modelling preferences: Uncertainty and ambiguitiy

Colin F. Camerer and Martin Weber

No 275, Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel from Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre

Abstract: In subjective expected utility (SEU) the decision weights people attach to events are their beliefs about the likelihood of events. Much empirical evidence, inspired by Ellsberg (1961) and others, shows that people prefer to bet on events they know more about, even when their beliefs are held constant. (They are averse to "ambiguity", or uncertainty about probability.) We review evidence, recent theoretical explanations, and applications of research on ambiguity and SEU.

Keywords: Ambiguity; uncertainty; Ellsberg paradox; non-expected utility (search for similar items in EconPapers)
JEL-codes: C91 D81 (search for similar items in EconPapers)
Date: 1991
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Related works:
Journal Article: Recent Developments in Modeling Preferences: Uncertainty and Ambiguity (1992)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cauman:275

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