We study orders of risk and model uncertainty aversion in the smooth ambiguity model proposed by Klibanoff, Marinacci, and Mukerji (2005). We consider a quadratic approximation of their model and we show that both risk and model uncertainty attitudes have at most a second order effect....

With the recession of 2008, "uncertainty" became a buzzword. Since then, economists have largely shaped how policymakers, politicians, and the general public think about uncertainty, through, among other means, models that explicitly account for uncertainty