Scholarlink

<p>We report the evidence of a multi-stage lab experiment on individual decision&#xa0;making under ambiguity, where the latter is characterized by the (partial or) absence of information on some monetary values in the support of the lottery distributions. This complements the standard treatment of uncertainty where decision&#xa0;makers know the monetary prizes, but probabilities are uncertain. We use both a structural and a non-structural approach when analyzing subjects’ behavior under risk, compound risk, and outcome ambiguity. Our main finding is that subjects are risk-averse and ambiguity lovers in that they evaluate more optimistically uncertain payoffs under ambiguity compared to compound risk. We also study how subjects evaluate scenarios with uncertain outcomes: 60% of choices are consistent with the Expected Utility paradigm, while 40% of them are better described by a heuristic we label as “naïve,” in which the order of integration of Expected Utility is reversed (that is, they first form a point estimate of the uncertain payoffs, and then they evaluate the lotteries’ expected utility). Finally, we also find that risk and ambiguity aversion are positively correlated.</p>

错误：搜索内容不能为空，请输入英文关键词
错误：关键词超出字数限制，请精简
高级检索

An experiment on outcome uncertainty

  • 期刊论文

  • 出版模式：

    开放获取

  • 发表日期：

    2025年4月2日

查看全文
  • Pedro Albarrán,
  • Judit Alonso,
  • Carmen Herrero,
  • Giovanni Ponti,
  • Marcello Sartarelli,
  • Diletta Topazio

摘要

We report the evidence of a multi-stage lab experiment on individual decision making under ambiguity, where the latter is characterized by the (partial or) absence of information on some monetary values in the support of the lottery distributions. This complements the standard treatment of uncertainty where decision makers know the monetary prizes, but probabilities are uncertain. We use both a structural and a non-structural approach when analyzing subjects’ behavior under risk, compound risk, and outcome ambiguity. Our main finding is that subjects are risk-averse and ambiguity lovers in that they evaluate more optimistically uncertain payoffs under ambiguity compared to compound risk. We also study how subjects evaluate scenarios with uncertain outcomes: 60% of choices are consistent with the Expected Utility paradigm, while 40% of them are better described by a heuristic we label as “naïve,” in which the order of integration of Expected Utility is reversed (that is, they first form a point estimate of the uncertain payoffs, and then they evaluate the lotteries’ expected utility). Finally, we also find that risk and ambiguity aversion are positively correlated.