Definitions of Ambiguous Events and the Smooth Ambiguity Model.
We examine a variety of preference-based definitions of ambiguous events in the context of the smooth ambiguity model. We first consider the definition proposed in Klibanoff et al. (Econometrica 73(6):1849-1892, 2005) based on the classic Ellsberg two-urn paradox (Ellsberg Q J Econ 75:643-669, 1961)...
| Main Authors: | , , |
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| Format: | Journal article |
| Language: | English |
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Springer
2011
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| _version_ | 1797051329995079680 |
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| author | Klibanoff, P Marinacci, M Mukerji, S |
| author_facet | Klibanoff, P Marinacci, M Mukerji, S |
| author_sort | Klibanoff, P |
| collection | OXFORD |
| description | We examine a variety of preference-based definitions of ambiguous events in the context of the smooth ambiguity model. We first consider the definition proposed in Klibanoff et al. (Econometrica 73(6):1849-1892, 2005) based on the classic Ellsberg two-urn paradox (Ellsberg Q J Econ 75:643-669, 1961) and show that it satisfies several desirable properties. We then compare this definition with those of Nehring (Math Soc Sci 38(2):197-213, 1999), Epstein and Zhang (Econometrica 69:265-306, 2001), Zhang (Econ Theory 20:159-181, 2002), and Ghirardato and Marinacci (J Econ Theory 102:251-289, 2002). Within the smooth ambiguity model, we show that Ghirardato and Marinacci (J Econ Theory 102:251-289, 2002) would identify the same set of ambiguous and unambiguous events as our definition while Epstein and Zhang (Econometrica 69:265-306, 2001) and Zhang (Econ Theory 20:159-181, 2002) would yield a different classification. Moreover, we discuss and formally identify two key sources of the differences compared to Epstein and Zhang (Econometrica 69:265-306, 2001) and Zhang (Econ Theory 20:159-181, 2002). The more interesting source is that these two definitions can confound non-constant ambiguity attitude and the ambiguity of an event. |
| first_indexed | 2024-03-06T18:17:58Z |
| format | Journal article |
| id | oxford-uuid:05483e69-5a76-44f0-80e5-1538f40971a1 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T18:17:58Z |
| publishDate | 2011 |
| publisher | Springer |
| record_format | dspace |
| spelling | oxford-uuid:05483e69-5a76-44f0-80e5-1538f40971a12022-03-26T08:56:16ZDefinitions of Ambiguous Events and the Smooth Ambiguity Model.Journal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:05483e69-5a76-44f0-80e5-1538f40971a1EnglishDepartment of Economics - ePrintsSpringer2011Klibanoff, PMarinacci, MMukerji, SWe examine a variety of preference-based definitions of ambiguous events in the context of the smooth ambiguity model. We first consider the definition proposed in Klibanoff et al. (Econometrica 73(6):1849-1892, 2005) based on the classic Ellsberg two-urn paradox (Ellsberg Q J Econ 75:643-669, 1961) and show that it satisfies several desirable properties. We then compare this definition with those of Nehring (Math Soc Sci 38(2):197-213, 1999), Epstein and Zhang (Econometrica 69:265-306, 2001), Zhang (Econ Theory 20:159-181, 2002), and Ghirardato and Marinacci (J Econ Theory 102:251-289, 2002). Within the smooth ambiguity model, we show that Ghirardato and Marinacci (J Econ Theory 102:251-289, 2002) would identify the same set of ambiguous and unambiguous events as our definition while Epstein and Zhang (Econometrica 69:265-306, 2001) and Zhang (Econ Theory 20:159-181, 2002) would yield a different classification. Moreover, we discuss and formally identify two key sources of the differences compared to Epstein and Zhang (Econometrica 69:265-306, 2001) and Zhang (Econ Theory 20:159-181, 2002). The more interesting source is that these two definitions can confound non-constant ambiguity attitude and the ambiguity of an event. |
| spellingShingle | Klibanoff, P Marinacci, M Mukerji, S Definitions of Ambiguous Events and the Smooth Ambiguity Model. |
| title | Definitions of Ambiguous Events and the Smooth Ambiguity Model. |
| title_full | Definitions of Ambiguous Events and the Smooth Ambiguity Model. |
| title_fullStr | Definitions of Ambiguous Events and the Smooth Ambiguity Model. |
| title_full_unstemmed | Definitions of Ambiguous Events and the Smooth Ambiguity Model. |
| title_short | Definitions of Ambiguous Events and the Smooth Ambiguity Model. |
| title_sort | definitions of ambiguous events and the smooth ambiguity model |
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