Ambiguity aversion is not universal

• Assuming universal ambiguity aversion, an extensive theoretical literature studies how ambiguity can account for market anomalies from the perspective of expected utility-based theories. We provide a systematic experimental assessment of ambiguity attitudes in different likelihood ranges, and in the gain domain, the loss domain and with mixed outcomes. We draw on a unified framework to elicit preferences across these domains. We replicate the usual finding of ambiguity aversion for moderate likelihood gains. However, when introducing losses or lower likelihoods, we observe predominantly ambiguity neutrality or seeking, rejecting universal ambiguity aversion. (C) 2017 Elsevier B.V. All rights reserved.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

Ambiguity aversion

Decision under uncertainty

Ellsberg experiments

decision-making

uncertainty aversion

risk-aversion

losses

gains

attitudes

representation

probabilities

portfolio

behavior

Business & Economics

ates of america

v110

p17143

Publikations- och innehållstyp

ref (ämneskategori)

art (ämneskategori)