The power-to-take game is a simple two player game where players are randomly divided into pairs consisting of a take authority and responder. Both players in each pair have earned an income in an individual real effort decision-making experiment preceding the take game. The game consists of two...

We review recent advances in the field of decision making under uncertainty or ambiguity.

This experimental study is concerned with the impact of the timing of the resolution of risk on people’s willingness to take risks, with a special focus on the role of affect. While the importance of anticipatory emotions has so far been only inferred from decisions regarding hypothetical...

We introduce a simple, easy to implement instrument for jointly eliciting risk and ambiguity attitudes. Using this instrument, we structurally estimate a two-parameter model of preferences. Our findings indicate that ambiguity aversion is significantly overstated when risk neutrality is assumed....

Two rationality arguments are used to justify the link between conditional and unconditional preferences in decision theory : dynamic consistency and consequentialism. Dynamic consistency requires that ex ante contingent choices are respected by up dated preferences. Consequentialism states that...

Many theories of updating under ambiguity assume either dynamic consistency or consequentialism to underpin behaviorally the link between conditional and unconditional preferences. To test the descriptive validity of these rationality concepts, we conduct a dynamic extension of Ellsbergʼs...

An extensive literature has studied ambiguity aversion in economic decision making, and how ambiguity aversion can account for empirically observed violations of expected utility-based theories. Almost all relevant applied models presume a general dislike of ambiguity. In this paper, we provide...

In this paper, ambiguity aversion to uncertain survival probabilities is introduced in a life-cycle model with a bequest motive to study the optimal demand for annuities. Provided that annuities return is sufficiently large, and notably when it is fair, positive annuitization is known to be...