Uncertain or ambiguous events cannot be objectively measured by probabilities, i.e. different decision makers may disagree about their likelihood of occurrence. This paper proposes a new decision-theoretical approach how to measure ambiguity (Knightian uncertainty) that is independent of...

Discounted utility theory and its generalizations (e.g., quasihyperbolic discounting, generalized hyperbolic discounting) use discount functions for weighting utilities of outcomes received in different time periods. We propose a new simple test of convexity-concavity of discount function. This...

A simplified definition of comparative ambiguity aversion (or uncertainty aversion, or aversion to Knightian uncertainty) via probability equivalents of binary Savage (1954) acts is proposed. Absolute ambiguity aversion is then defined as ambiguity aversion relative to a benchmark ambiguity...

The referendum (or compound majority) paradox occurs when the majority of voters in the majority of districts supports an issue/candidate but the majority of voters across all districts opposes the same issue/candidate (or vice versa). We calculate the likelihood of this social choice anomaly...