This paper studies an economy where agents trade using a shared language, so that they do not need to meet in person with goods physically present. Agents provide vague descriptions of proposed net trades, which we interpret as arising either from inherent limitations in what the agents can...

We provide a theory of decision under ambiguity in which the worst-case and best-case expected utility representations are sufficient statistics for a decision maker's preferences; we refer to the new utility functions as meta-utilities. Our approach, which generalizes many of the commonly used...

This paper provides a simple explanation for systematic violations of expected utility theory in Allais-type tasks. We demonstrate that the main reason our participants violate expected utility theory is aversion to receiving a zero outcome, and not an attraction to a certain outcome. We call...

The Allais Paradox is a central motivation for several prominent extensions of expected utility, including rank-dependent theories and the theory of fanning-out indifference curves. We examine the ability of these theories to explain the Allais common consequence effect. The only extension of...