“linearity in the probabilities” aspect of expected utility theory to game theory. The chapter consists of two main parts: The …-dependent utility models and cumulative prospect theory. The second part reviews theories of decision making under uncertainty that … depart from the sure thing principle and model the phenomenon of ambiguity and ambiguity aversion. …

and ambiguity aversion. This is modeled as a random set of beliefs in the maxmin expected utility model of Gilboa and …We introduce a model of random ambiguity aversion. Choice is stochastic due to unobserved shocks to both information … Schmeidler (1989). We characterize the model and show that the distribution of ambiguity aversion can be uniquely identified …

of beliefs (or ambiguity), imprecision of tastes (or multi-utility), and state dependence of utility. Examples include … phenomena, as well as state-dependent multi-utility generalisations of popular ambiguity models …Many decision situations involve two or more of the following divergences from subjective expected utility: imprecision …

Given the possibility to modify the probability of a loss, will a profit-maximizing insurer engage in loss prevention … expected profit maximizing loss probability within an expected utility framework. We then use Köszegi and Rabin's (2006, 2007 … engage in loss prevention activities, this to the benefit of consumers. Our results show that one should be cautious in doing …

Debreu proposed the notion of `least concave utility' as a way to disentangle risk attitudes from the certainty … examines a corresponding decomposition of preference. The analysis is carried out within the Choquet expected utility model of …

be stable over time. In this paper, we analyze the stability of ambiguity preferences experimentally. We repeatedly … elicit ambiguity attitudes towards multiple 3-color Ellsberg urns over a period of two months. In our data, 57% of the …

parameter in a generalized utility function. We find that ambiguity aversion varies across individuals, and with the level of … theoretical work on ambiguity builds on maxmin expected utility, our results provide evidence that MEU does not adequately capture …This paper provides a systematic analysis of individual attitudes towards ambiguity, based on laboratory experiments …

parameter in a generalized utility function. We find that ambiguity aversion varies across individuals, and with the level of … theoretical work on ambiguity builds on maxmin expected utility, our results provide evidence that MEU does not adequately capture …This paper provides a systematic analysis of individual attitudes towards ambiguity, based on laboratory experiments …

We propose and axiomatically characterize a representation of ambiguity sensitive preferences. The distinguishing … maker exhibits a consistent tradeoff between risk and ambiguity concerns. Under our representation of her preferences, any … act is assessed by its subjective expected utility and a residual that captures her assessment of the act's exposure to …