When confronted with uncertain prospects, people often exhibit both choice deferral and Ellsberg-type ambiguity …

uncertainty when the firm's preferences exhibit smooth ambiguity aversion. Ambiguity is modeled by a second-order probability … distribution that captures the firm's uncertainty about which of the subjective beliefs govern the exchange rate risk. Ambiguity … ambiguity has no impact on the firm's propensity to export to a foreign country. Ambiguity and ambiguity aversion, however, are …

We examine risk taking when the bank's preferences exhibit smooth ambiguity aversion. Ambiguity is modeled by a second … return risk. Ambiguity preferences are modeled by the (second-order) expectation of a concave transformation of the (first … banking firm finds it less attractive to take risk in the presence than in the absence of ambiguity. This result extends to …

In this paper, we establish an axiomatically founded generalized recursive smooth ambiguity model that allows for a … separation among intertemporal substitution, risk aversion, and ambiguity aversion. We axiomatize this model using two approaches … Seo (2009). We characterize risk attitude and ambiguity attitude within these two approaches. We then discuss our model …

ambiguity averse relation. First, we define two notions of more ambiguous with respect to such a class. A more ambiguous (I) act … makes an ambiguity averse decision maker (DM) worse off but does not affect the welfare of an ambiguity neutral DM. A more … ambiguous (II) act adversely affects a more ambiguity averse DM more, as measured by the compensation they require to switch …

between the set of relevant measures, shown by KMS [21] to reflect only perceived ambiguity, and the set of measures (which we … perceived ambiguity. Regarding symmetry assumptions, we show that, under relatively mild conditions, a variety of preference … stringent. Only when it is satisfied may the Bewley set be interpreted as reflecting only perceived ambiguity and not also taste …

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

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. …