Reacting to ambiguous messages: an experimental analysis

Christian Kellner, Mark T. Le Quement, Gerhard Riener

Ambiguous language is ubiquitous and often deliberate. Recent theoretical work (Beauchêne et al., 2019; Bose and Renou, 2014; Kellner and Le Quement, 2018) has shown how language ambiguation can improve outcomes by mitigating conflict of interest. Our experiment finds a significant effect of language ambiguation on subjects who are competent Bayesian updaters. For both ambiguity averse and neutral subjects within this population, one significant channel is behavioral in nature (anchoring). For ambiguity averse subjects, another channel of similar magnitude is hedging motivated by the desire to reduce ambiguity. This channel is absent in the case of ambiguity neutral subjects.

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Year of publication:	December 2020
Authors:	Kellner, Christian ; Thordal-Le Quement, Mark ; Riener, Gerhard
Publisher:	Düsseldorf, Germany : Heinrich-Heine-University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
Subject:	Ambiguity aversion \| Communication \| Persuasion \| Laboratory experiment \| Experiment \| Entscheidung unter Unsicherheit \| Decision under uncertainty \| Risikoaversion \| Risk aversion \| Kommunikation \| Spieltheorie \| Game theory \| Entscheidungstheorie \| Decision theory \| Prospect Theory \| Prospect theory \| Experimentelle Ökonomik \| Experimental economics