Ambiguity attitudes, framing, and consistency

Voorhoeve, Alex, Binmore, Ken G, Stefansson, Arnaldur and Stewart, Lisa (2016) Ambiguity attitudes, framing, and consistency. Theory and Decision, 81 (3). pp. 313-337. ISSN 0040-5833

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Abstract

We use probability-matching variations on Ellsberg’s single-urn experiment to assess three questions: (1) How sensitive are ambiguity attitudes to changes from a gain to a loss frame? (2) How sensitive are ambiguity attitudes to making ambiguity easier to recognize? (3) What is the relation between subjects’ consistency of choice and the ambiguity attitudes their choices display? Contrary to most other studies, we find that a switch from a gain to a loss frame does not lead to a switch from ambiguity aversion to ambiguity neutrality and/or ambiguity seeking. We also find that making ambiguity easier to recognize has little effect. Finally, we find that while ambiguity aversion does not depend on consistency, other attitudes do: consistent choosers are much more likely to be ambiguity neutral, while ambiguity seeking is much more frequent among highly inconsistent choosers.

Item Type:	Article
Official URL:	http://link.springer.com/journal/11238
Additional Information:	© 2016 The Author(s) © CC BY 4.0
Library of Congress subject classification:	B Philosophy. Psychology. Religion > B Philosophy (General)
Journal of Economic Literature Classification System:	C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior D - Microeconomics > D0 - General
Sets:	Departments > Philosophy, Logic and Scientific Method
Project and Funder Information:	Project ID Funder Name Funder ID AH/J006033/1 Arts and Humanities Research Council http://dx.doi.org/10.13039/501100000267 295449 Seventh Framework Programme http://dx.doi.org/10.13039/501100004963 UNSPECIFIED Suntory and Toyota International Centres for Economics and Related Disciplines UNSPECIFIED
Date Deposited:	02 Mar 2016 12:44
URL:	http://eprints.lse.ac.uk/65577/

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