منابع مشابه
Ambiguity Aversion and Absence of Trade∗
In a equilibrium model with uncertainty averse consumers, we prove that more ambiguity aversion implies less trade. The reduction in trade caused by ambiguity aversion can be as severe as to lead to no-trade, even in the Choquet Expected Utility (CEU) or Maximin Expected Utility (MEU) models. Our results do not assume that consumers have constant endowments, as usual in the literature, but only...
متن کاملAmbiguity and Ambiguity Aversion
Consider the following choice problem, known as “Ellsberg’s three-color urn example”, or simply the “Ellsberg Paradox” (Ellsberg [7]). An urn contains 30 red balls, and 60 green and blue balls, in unspecified proportions; subjects are asked to compare (i) a bet on a red draw vs. a bet on a green draw, and (ii) a bet on a red or blue draw vs. a bet on a green or blue draw. If the subject wins a ...
متن کاملHypothesis Testing and Ambiguity Aversion∗
We study a model of non-Bayesian updating, based on the Hypothesis Testing model of Ortoleva (2012), for ambiguity averse agents. Agents ranks acts following the MaxMin Expected Utility model of Gilboa and Schmeidler (1989) and when they receive new information they update their set of priors as follows: If the information is such that all priors in the original set of priors assign to it a pro...
متن کاملDecreasing aversion under ambiguity
Under which condition does the set of desirable uncertain prospects expand when wealth increases? We show that the decreasing concavity (DC) of the utility function is necessary and sufficient in the −maxmin expected utility model. In the smooth ambiguity aversion model with the ambiguity valuation function , the DC of and of ◦ is necessary and sufficient. An alternative definition of d...
متن کاملAmbiguity Aversion and Auction Theory
This paper considers when the utility function of the bidders is ambiguity averse, how does the bidding strategy differ in four classical auction mechanisms. In particular, if there is no information affiliation, i.e., when first order sealed auction is equivalent to English auction in terms of bidding, bidders may bid higher or lower relative to ambiguity neutral case. From the seller’s point ...
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ژورنال
عنوان ژورنال: Economic Theory
سال: 2011
ISSN: 0938-2259,1432-0479
DOI: 10.1007/s00199-011-0642-6