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Probabilistic risk beliefs are key drivers of economic and health decisions, but people are not always certain about their beliefs. We study these "imprecise probabilities", also known as ambiguous beliefs. We show that imprecision is measurable separately from the levels of risk beliefs. People...
Persistent link: https://www.econbiz.de/10014469382
Before choosing her action to match the state of the world, an agent observes a stream of messages generated by some unknown binary signal. The agent can either learn the underlying signal for free and update her belief accordingly or ignore the observed message and keep her prior belief. After...
Persistent link: https://www.econbiz.de/10014517426
ambiguity aversion. This characterization extends to regret-based models as well. As an application of our general result, we … characterize dynamically consistent updating for two important models of ambiguity averse preferences: the ambiguity averse smooth … ambiguity preferences (Klibanoþ, Marinacci and Mukerji [Econometrica 73 2005, pp. 1849-1892]) and the variational preferences …
Persistent link: https://www.econbiz.de/10010266275
In this paper, we consider a decision-maker who tries to learn the distribution of outcomes from previously observed cases. For each observed database of cases the decision-maker predicts a set of priors expressing his beliefs about the underlying probability distribution. We impose a version of...
Persistent link: https://www.econbiz.de/10010270218
sufficiently high ambiguity, more than two messages are often necessary to implement the optimal decision rule of S, though only … not implement the optimal decision rule of S, which is not the case in the absence of ambiguity. Fourth, we show that the … addition of a little ambiguity may generate influential communication that is unambiguously advantageous to S. Fifth, we …
Persistent link: https://www.econbiz.de/10010332670
We provide an axiomatic approach to a belief formation process in an informational environment characterized by limited, heterogenous and diff erently precise information. For a list of previously observed cases an agent needs to express her belief by assigning probabilities to possible...
Persistent link: https://www.econbiz.de/10010427183
I experimentally examine whether feedback about others' choices provides an anchor for decision-making under ambiguity … relative ambiguity attitude (compared to the peer's) significantly matters for shifts in individual attitudes, and that … dynamics considerably differ between gain and loss domains. For gains, learning to be comparably ambiguity averse increases the …
Persistent link: https://www.econbiz.de/10010427692
This paper investigates beliefs in an ambiguous environment. In contrast to many previous studies, the beliefs regarding possible scenarios are measured independently from attitudes. We use laboratory experiments to estimate the entire distribution of subjective beliefs and examine how beliefs...
Persistent link: https://www.econbiz.de/10012432761
regarding the realization likelihood of cash flows, the subjective attitude towards risk, and the attitude towards ambiguity …. While previous literature looks at the total price discount under ambiguity, this paper investigates with laboratory … belief effects, the risk premiums, and the ambiguity premiums from each other. Both methods lead to similar results: Overall …
Persistent link: https://www.econbiz.de/10012489886
We introduce a model of random ambiguity aversion. Choice is stochastic due to unobserved shocks to both information … and ambiguity aversion. This is modeled as a random set of beliefs in the maxmin expected utility model of Gilboa and … Schmeidler (1989). We characterize the model and show that the distribution of ambiguity aversion can be uniquely identified …
Persistent link: https://www.econbiz.de/10013189043