Showing 1 - 10 of 774
Persistent link: https://www.econbiz.de/10013341478
Using choices among hypothetical income lotteries from respondents to a large Norwegian survey, we analyse the association between attitudes towards risks and socio-economic characteristics by means of an ordered probit model. Next, we impute a risk aversion measure to every respondent and use...
Persistent link: https://www.econbiz.de/10014197823
We study the problem of elicitation of subjective beliefs of an agent when the beliefs are ambiguous (the set of beliefs is a non-singleton set) and the agent's preference exhibits ambiguity aversion; in particular, as represented by alpha-maxmin preferences. We construct a direct revelation...
Persistent link: https://www.econbiz.de/10012969749
This paper sets out an ordinal theory of choice under risk that is capable of replicating and extending important results obtained in the EU framework and is yet far more descriptive and no less tractable at the same time. Focusing on decision problems where attitudes towards risk and...
Persistent link: https://www.econbiz.de/10012909352
The paper studies when efficient allocations are implementable via coalition-proof mechanisms. When ambiguous mechanisms are allowed and agents are maxmin expected utility maximizers, we prove that all efficient allocations are implementable via interim coalition incentive compatible mechanisms...
Persistent link: https://www.econbiz.de/10013242607
This chapter reviews developments in the theory of decision making under risk and uncertainty, focusing on models that, over the last 40 years, dominated the theoretical discussions. It also surveys some implications of the departures from the “linearity in the probabilities” aspect of...
Persistent link: https://www.econbiz.de/10014025442
We study contests between players who rank uncertain outcomes using two parameters: the mean and the variance. This framework admits situations where players do not obey the axioms of expected utility maximization and represents an interesting modification of the usual assumptions in the contest...
Persistent link: https://www.econbiz.de/10013101029
We propose that there are three determinants of sender behavior in trust games: Beliefs re-garding the amounts returned, risk aversion, and reciprocity. Particularly, we are interested in the role of reciprocity because the possibility of negative expected reciprocal utility may lead to...
Persistent link: https://www.econbiz.de/10013056469
We introduce and analyze three definitions of equilibrium for finite extensive games with imperfect information and ambiguity averse players. In a setting where players' preferences are represented by maxmin expected utility, as characterized in Gilboa and Schmeidler (1989), our definitions...
Persistent link: https://www.econbiz.de/10013064382
Willingness to take risk depends on whether the risk affects others as well as oneself and on how the risk affects oneś position vis-á-vis others. Taking a bet can improve oneś position relative to others or threaten it. We present an experiment that explores individual attitudes to lotteries...
Persistent link: https://www.econbiz.de/10009784058