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Klibanoff, Peter; Mukerji, Sujoy; Seo, Kyoungwon - 2017

between the set of relevant measures, shown by KMS [21] to reflect only perceived ambiguity, and the set of measures (which we … perceived ambiguity. Regarding symmetry assumptions, we show that, under relatively mild conditions, a variety of preference … stringent. Only when it is satisfied may the Bewley set be interpreted as reflecting only perceived ambiguity and not also taste …

Persistent link: https://www.econbiz.de/10011694779

Foundations of ambiguity models under symmetry : α-MEU and smooth ambiguity

Klibanoff, Peter; Mukerji, Sujoy; Seo, Kyoungwon; … - 2021 - This Version: January 13, 2021

The α-MEU model and the smooth ambiguity model are two popular models in decision making under ambiguity. However, the …

Persistent link: https://www.econbiz.de/10012422419

Random dual expected utility

Ma, Wei - In: Economic theory 75 (2023) 2, pp. 293-315

Persistent link: https://www.econbiz.de/10014226632

Stochastic choice and preference reversals

Alós-Ferrer, Carlos; Buckenmaier, Johannes; Garagnani, … - 2020 - This version: December 7th, 2020

The preference reversal phenomenon is one of the most important, long-standing, and widespread anomalies contradicting economic models of decisions under risk. It describes the robust observation of frequent "standard reversals" where long-shot gambles are valued above moderate ones but then the...

Persistent link: https://www.econbiz.de/10012390055

The role of intuition and reasoning in driving aversion to risk and ambiguity

Butler, Jeff; Guiso, Luigi; Jappelli, Tullio - C.E.P.R. Discussion Papers - 2011

Using a large sample of retail investors as well as experimental data we find that risk and ambiguity aversion are … positively correlated. We show the common link is decision style: intuitive thinkers tolerate more risk and ambiguity than … find that risk and ambiguity aversion vary with individual characteristics and wealth. The wealthy are less risk averse but …

Persistent link: https://www.econbiz.de/10008915807

Trading mechanism selection with directed search when buyers are risk averse

Selcuk, Cemil - In: Economics Letters 115 (2012) 2, pp. 207-210

We endogenize the trading mechanism selection in a model of directed search with risk averse buyers and show that the unique symmetric equilibrium entails all sellers using fixed price trading. Mechanisms that prescribe the sale price as a function of the realized demand (auctions, bargaining,...

Persistent link: https://www.econbiz.de/10011041699

Learning and risk aversion

Oyarzun, Carlos; Sarin, Rajiv - In: Journal of Economic Theory 148 (2013) 1, pp. 196-225

We study how learning shapes behavior towards risk when individuals are not assumed to know, or to have beliefs about, probability distributions. In any period, the behavior change induced by learning is assumed to depend on the action chosen and the payoff obtained. We characterize learning...

Persistent link: https://www.econbiz.de/10010616903

Why humans care about sunk costs while animals don't: an evolutionary explanation

Höffler, Felix - 2005

While humans often care about sunk investment, animals are not subject to this sort of sunk cost behavior or "Concorde fallacy". This paper investigates a simple two stage decision problem under uncertainty. At the second stage, subjects can commit the Concorde fallacy by sticking to the first...

Persistent link: https://www.econbiz.de/10010264771

Why humans care about sunk costs while animals don't. An evolutionary explanation

Höffler, Felix - Max-Planck-Institut zur Erforschung von … - 2005

While humans often care about sunk investment, animals are not subject to this sort of sunk cost behavior or “Concorde fallacy”. This paper investigates a simple two stage decision problem under uncertainty. At the second stage, subjects can commit the Concorde fallacy by sticking to the...

Persistent link: https://www.econbiz.de/10005772751

Testing the reference-dependent model : a laboratory search experiment

Miura, Takahiro; Inukai, Keigo; Sasaki, Masaru - 2019

Our paper conducts laboratory experiments with the sequential search model to test whether participants engage in search activities in line with theoretical predictions derived from the expected utility model or the reference-dependent model, without assuming any specific formulation rule for a...

Persistent link: https://www.econbiz.de/10012019322

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