of consequences, η:Δ→[0,∞] is an ambiguity index, and Δ is the set of priors over the state space S. This representation …

of ambiguity, there exists an equilibrium with inertia where agents also insure fully against Knightian uncertainty. When … the level of ambiguity exceeds a critical threshold, full insurance no longer prevails and there exist equilibria with …

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 …

from convex (through randomization) sets, and connects them by defining a behavioral notion of perceived ambiguity …. Substantively, a main idea is to behaviorally identify ambiguity with failures of independence of irrelevant alternatives. Regarding …

We model decision making under ambiguity based on available data. Decision makers express preferences over actions and … perceived ambiguity). We identify the subjectively perceived ambiguity and separate it into ambiguity due to a limited number of … observations and ambiguity due to data heterogeneity. The special case of no ambiguity provides a behavioral foundation for beliefs …