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Navigating ambiguity : imprecise probabilities and the updating of disease risk beliefs
Kerwin, Jason; Pandey, Divya - 2023
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 with higher levels of imprecision update their beliefs more in …
Persistent link: https://www.econbiz.de/10014390526
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Believe me when I say green! : heterogeneous expectations and climate policy uncertainty
Campiglio, Emanuele; Lamperti, Francesco; Terranova, Roberta - 2023 - This version: March 2023
We develop a dynamic model where heterogeneous firms take investment decisions depending on their beliefs on future …
Persistent link: https://www.econbiz.de/10014232654
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Measuring strategic uncertainty in coordination games
Heinemann, Frank; Nagel, Rosemarie; Ockenfels, Peter - 2004
subjective beliefs of players. In a laboratory experiment we measure subjects' certainty equivalents for three coordination games …
Persistent link: https://www.econbiz.de/10010361993
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Alternation bias and the parameterization of cumulative prospect theory
Kaivanto, Kim - 2007 - This version: January 17, 2007
Two recently published studies argue that conventional parameterizations of cumulative prospect theory (CPT) fail to resolve the St. Petersburg Paradox. Yet as a descriptive theory CPT is not intended to account for the local representativeness effect, which is known to induce 'alternation bias'...
Persistent link: https://www.econbiz.de/10010381700
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A model of reference-dependent belief updating
Maier, Johannes K.; König, Clemens - 2016
We propose a model of instrumental belief choice under loss aversion. When new information arrives, an agent is prompted to abandon her prior. However, potential posteriors may induce her to take actions that generate a lower utility in some states than actions induced by her prior. These losses...
Persistent link: https://www.econbiz.de/10011557745
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Risk aversion under preference uncertainty
Kräussl, Roman; Lucas, André; Siegmann, Arjen - 2010 - This version: November 25, 2010
We show that if an agent is uncertain about the precise form of his utility function, his actual relative risk aversion may depend on wealth even if he knows his utility function lies in the class of constant relative risk aversion (CRRA) utility functions. We illustrate the consequences of this...
Persistent link: https://www.econbiz.de/10008748092
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Risk aversion under preference uncertainty
Kräussl, Roman; Lucas, André; Siegmann, Adriaan Hendrik - 2010
We show that if an agent is uncertain about the precise form of his utility function, his actual relative risk aversion may depend on wealth even if he knows his utility function lies in the class of constant relative risk aversion (CRRA) utility functions. We illustrate the consequences of this...
Persistent link: https://www.econbiz.de/10011382430
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Risk Aversion Under Preference Uncertainty
Kräussl, Roman - 2012
We show that if an agent is uncertain about the precise form of his utility function, his actual relative risk aversion may depend on wealth even if he knows his utility function lies in the class of constant relative risk aversion (CRRA) utility functions. We illustrate the consequences of this...
Persistent link: https://www.econbiz.de/10013115460
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The Value of a Stochastic Information Structure
Azrieli, Yaron - 2008
Upon observing a signal, a Bayesian decision maker updates her probability distribution over the state space, chooses an action, and receives a payoff that depends on the state and the action taken. An information structure determines the set of possible signals and the probability of each...
Persistent link: https://www.econbiz.de/10012771602
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Structured Ambiguity and Model Misspecification
Hansen, Lars Peter - 2020
A decision maker is averse to not knowing a prior over a set of restricted structured models (ambiguity) and suspects that each structured model is misspecified. The decision maker evaluates intertemporal plans under all of the structured models and, to recognize possible misspecifications,...
Persistent link: https://www.econbiz.de/10012850959