Despite ample evidence of ambiguity preferences in individual decision making, experimental studies of ambiguity effects in financial markets are scarce and inconclusive. Although a number of theoretical studies explain empirical puzzles in finance with ambiguity preferences, it is not a given...

Although a number of theoretical studies explain empirical puzzles in finance with ambiguity aversion, it is not a given that individual ambiguity attitudes survive in markets. In fact, despite ample evidence of ambiguity aversion in individual decision making, most studies find no or only...

Decision makers often take risky decisions on the behalf of others rather than for themselves. Competing theoretical models predict both, higher as well as lower levels of risk aversion when taking risk for others, and the experimental evidence is mixed. In our within-subject design, money...

The underpricing of initial public offerings is a well-documented fact of empirical equity market research. Theories explain this underpricing with market imperfections. We study three empirically relevant IPO mechanisms under almost perfect market conditions in the laboratory: a stylized book...