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, Marinacci, and Mukerji (2005) based on the classic Ellsberg two-urn paradox (Ellsberg (1961)), and show that it satisfies se...
| Main Authors: | , , |
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| Format: | Working paper |
| Language: | English |
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Department of Economics (University of Oxford)
2011
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| _version_ | 1797099203881598976 |
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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, Marinacci, and Mukerji (2005) based on the classic Ellsberg two-urn paradox (Ellsberg (1961)), and show that it satisfies several desirable properties. We then compare this definition with those of Nehring (1999), Epstein and Zhang (2001), Zhang (2002) and Ghirardato and Marinacci (2002). Within the smooth ambiguity model, we show that Ghirardato and Marinacci (2002) would identify the same set of ambiguous and unambiguous events as our definition while Epstein and Zhang (2001) and Zhang (2002) would yield a different classification. Moreover, we discuss and formally identify two key sources of the differences compared to Epstein and Zhang (2001) and Zhang (2002). The more interesting source is that these two definitions can confound non-constant ambiguity attitude and the ambiguity of an event. |
| first_indexed | 2024-03-07T05:20:23Z |
| format | Working paper |
| id | oxford-uuid:dead0fe6-978a-4182-a153-56ecfee8813f |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T05:20:23Z |
| publishDate | 2011 |
| publisher | Department of Economics (University of Oxford) |
| record_format | dspace |
| spelling | oxford-uuid:dead0fe6-978a-4182-a153-56ecfee8813f2022-03-27T09:33:56ZDefinitions of Ambiguous Events and the Smooth Ambiguity Model.Working paperhttp://purl.org/coar/resource_type/c_8042uuid:dead0fe6-978a-4182-a153-56ecfee8813fEnglishDepartment of Economics - ePrintsDepartment of Economics (University of Oxford)2011Klibanoff, 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, Marinacci, and Mukerji (2005) based on the classic Ellsberg two-urn paradox (Ellsberg (1961)), and show that it satisfies several desirable properties. We then compare this definition with those of Nehring (1999), Epstein and Zhang (2001), Zhang (2002) and Ghirardato and Marinacci (2002). Within the smooth ambiguity model, we show that Ghirardato and Marinacci (2002) would identify the same set of ambiguous and unambiguous events as our definition while Epstein and Zhang (2001) and Zhang (2002) would yield a different classification. Moreover, we discuss and formally identify two key sources of the differences compared to Epstein and Zhang (2001) and Zhang (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 |
| work_keys_str_mv | AT klibanoffp definitionsofambiguouseventsandthesmoothambiguitymodel AT marinaccim definitionsofambiguouseventsandthesmoothambiguitymodel AT mukerjis definitionsofambiguouseventsandthesmoothambiguitymodel |