perceived ambiguity. We argue that, under specific assumptions, the potential complexity of the link-structures creates extra … uncertainty or ambiguity over the "right" probability distribution to consider. This result affects the optimal equilibrium …

We analyze a market populated by expected utility maximizers and smooth ambiguity-averse consumers. We study conditions … under which ambiguity-averse consumers survive and affect prices in the limit. If ambiguity vanishes with time or if the … economy exhibits no aggregate risk, ambiguity-averse consumers survive, but have no long-run impact on prices. In both …