depart from the sure thing principle and model the phenomenon of ambiguity and ambiguity aversion. …

This paper investigates the effects of an increase in ambiguity aversion and an increase in ambiguity in an insurance … bargaining game with a risk-and-ambiguity-neutral insurer and a risk-and-ambiguity-averse client. Both a cooperative and a non …-cooperative bargaining game are examined. We show that, in both games, full coverage is optimal in the presence of ambiguity, and that the …

from convex (through randomization) sets, and connects them by defining a behavioral notion of perceived ambiguity …. Substantively, a main idea is to behaviorally identify ambiguity with failures of independence of irrelevant alternatives. Regarding …

We consider two plausible and even natural examples of ambiguity aversion: the classical Ellsberg (1961) two …

The phenomena of ambiguity and ambiguity aversion , introduced in Daniel Ellsberg’s seminal 1961 article, are … analytical descriptions of the numerous (primarily axiomatic) models of ambiguity aversion which have been developed by economic … theorists, and concludes with a discussion of some current theoretical topics and newer examples of ambiguity aversion. …

smooth ambiguity aversion by not using subjective probabilities (which are not directly observable) and by not committing to … (violations of) dynamic decision principles; (d) comparative smooth ambiguity aversion by not requiring identical second … descriptive appropriateness of utility to model risk and ambiguity attitudes. …

We identify the conditions where robust mean–variance preferences, which capture ambiguity aversion, are … observational equivalence holds regardless of the degree of ambiguity aversion. …