Preview |
PDF, English
Download (293kB) | Terms of use |
Abstract
We implement an experiment to elicit subjects’ ambiguity attitudes in the spirit of Ellsberg’s three-color urn. The procedure includes three design elements that (together) have not been featured in similar experiments: Strict ambiguity preferences, a single decision, and a mechanical randomization device with an unknown distribution (to both subjects and experimenters). We use this device in order to eliminate possible ‘strategic’ ambiguity related to subjects’ beliefs about the experimenters’ motivations. In addition, we survey 40 experimental studies on Ellsberg’s two- and three-color problems, and find that, on average, slightly more than half of subjects are classified as ambiguity averse. Our results, with our new design, fall on the low end of the range of results in the surveyed studies, and are comparable to a control test where “strategic” ambiguity was induced.
Document type: | Working paper |
---|---|
Series Name: | Discussion Paper Series / University of Heidelberg, Department of Economics |
Volume: | 0555 |
Date Deposited: | 21 Mar 2014 14:34 |
Date: | March 2014 |
Number of Pages: | 19 |
Faculties / Institutes: | The Faculty of Economics and Social Studies > Dean's Office of The Faculty of Economics and Social Studies The Faculty of Economics and Social Studies > Alfred-Weber-Institut for Economics |
DDC-classification: | 330 Economics |
Uncontrolled Keywords: | ambiguity aversion, uncertainty, experiment, Ellsberg. |
Series: | Discussion Paper Series / University of Heidelberg, Department of Economics |