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Economic systems are increasingly prone to complexity and uncertainty. Therefore, making well-informed decisions … requires risk analysis, control and mitigation. In some areas such as finance, insurance, crisis management and health care …
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We conduct an incentivized experiment on a nationally representative US sample (N=708) to test whether people prefer to avoid ambiguity even when it means choosing dominated options. In contrast to the literature, we find that 55% of subjects prefer a risky act to an ambiguous act that always...
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