competence hypothesis (Heath & Tversky, 1991), this pattern derives from favorable perceptions of one's competence. In most past … tests of the competence hypothesis, ambiguity is confounded with personal controllability and the source of the ambiguity (e … effects of both ambiguity aversion and competence. In Experiment 1, participants preferred an unambiguous chance-based option …

in the domain of risky choice, and many theories of ambiguity aversion deal with ambiguity only in this context. However … choice. Subjects imagine they are expecting a package and must choose between two delivery options. Some delivery times are … service preferred when it was the unambiguous option. Ambiguity aversion is not specific to risk, but can also occur in other …

accurate beliefs.  While some of this deviation is explained by overconfidence, 34% of it can only be explained by the control …We document a lower bound for thecontrol premium: agents' willingness to pay to control their own payoff. Participants … will pay off.  Participants are 20% more likely to choose to control their payoff than a group of payoff-maximizers with …

run' entrants and risk-seeking behavior. A psychological explanation is that people (entrepreneurs) are overconfident in …–following Heath and Tversky (1991)–that people seek ambiguity when the source of uncertainty is related to their competence …. Overconfidence, as such, plays no role. This hypothesis is confirmed in an experimental study that also documents the phenomenon of …

relationship between competence and self-awareness explains a great deal of the overconfidence observed among economic agents. More … specifically, overconfidence is inversely proportional to competence. Through a series of experiments and analyses of field data … competence in a given domain. However, individuals can only judge their competence if they are sufficiently competent. The …

Empirical studies of horse race betting in the US, the UK, Australia, and Germany have empirically established the so … assumption of a homogeneous bettor population with a preference for risk. However, the risk-love explanation has also been … be the market equilibrium outcome even with risk neutral bettors and even if the median estimate is correct. We provide …