investigate how informational ambiguity in conjunction with waves of optimism and pessimism affect investor behavior, social … learning and price dynamics. Without ambiguity, neither herding nor contrarianism is possible. If there is ambiguity and agents … have invariant ambiguity preferences, only contrarianism is possible. If on the other hand ambiguity is high and traders …

decisions on risk assessment and risk management under conditions of ambiguity, i.e. where probabilities cannot be assigned to … underpins conventional cost-benet analysis (CBA). The other requires that an ambiguity-averse decision-rule - of which maxmin …