Career Concerns and Ambiguity Aversion

Why do people have ambiguity aversion, preferring, a gamble with a 50% chance of success to one whose expected probability of success is 50% but where that 50% is an unbiased estimate? The answer modelled here, in the spirit of the career concerns literature, is learning: a risk-averse person does not wish observers to learn whether he is good or bad at estimating probabilities. He therefore prefers a gamble with objective probabilities.

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Year of publication:	2008-05
Authors:	Rasmusen, Eric
Institutions:	Department of Business Economics and Public Policy, Kelley School of Business
Subject:	time inconsistency \| hyperbolic discounting

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 2008-12
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005696167