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A Two-Ball Ellsberg Paradox: An Experiment

Brian Jabarian, Simon Lazarus

arXiv 9 Jun 2022 · Theoretical Economics · 2 citations (OpenAlex)

arXiv:2206.04605 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We conduct an incentivized experiment on a nationally representative US sample \\ (N=708) to test whether people prefer to avoid ambiguity even when it means choosing dominated options. In contrast to the literature, we find that 55% of subjects prefer a risky act to an ambiguous act that always provides a larger probability of winning. Our experimental design shows that such a preference is not mainly due to a lack of understanding. We conclude that subjects avoid ambiguity per se rather than avoiding ambiguity because it may yield a worse outcome. Such behavior cannot be reconciled with existing models of ambiguity aversion in a straightforward manner.

Citation extraction

28
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42
in-text mentions
28
distinct cited
1
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10,114
main-text words

appendix boundary found by appendix_command · 78% of the source is main text. Read the extracted text to check this.

Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Gillen, Ben, Erik Snowberg, and Leeat Yariv (2019) Experimenting with measurement error: Techniques with applications to the caltech cohort study0.92843100%
2Halevy, Yoram (2007) Ellsberg revisited: An experimental study0.81142100%
3Gilboa, Itzhak and David Schmeidler (1989) Maxmin expected utility with non-unique prior0.73732100%
4Machina, Mark J (2009) Risk, ambiguity, and the rank-dependence axioms0.58531100%
5Anscombe, F. J. and R. J. Aumann (1963) A definition of subjective probability0.51121100%
6Ellsberg, Daniel (1961) Risk, ambiguity, and the savage axioms0.51121100%
7Klibanoff, Peter, Massimo Marinacci, and Sujoy Mukerji (2005) A smooth model of decision making under ambiguity0.51121100%
8Savage, Leonard J (1954) The foundations of statistics0.51121100%
9Blavatskyy, Pavlo R (2013) Two examples of ambiguity aversion0.40511100%
10Ghirardato, Paolo, Fabio Maccheroni, and Massimo Marinacci (2004) Differentiating ambiguity and ambiguity attitude0.40511100%

Showing the top 10 of 28 scored citations.