2008/04/25 by Peter P. Wakker · 1 citation
Decision Sciences · Social Sciences · #Decision-Making and Behavioral Economics #Risk Perception and Management
paper · doi:10.1057/9780230226203.1753
openalex publication_date 2008/04/25 · openalex created_date 2022/05/12 · openalex updated_date 2026/04/15
This article deals with individual decision making under uncertainty (unknown probabilities). Risk (known probabilities) is not treated as a separate case, but as a sub-case of uncertainty. Many results from risk naturally extend to uncertainty. The Allais paradox, commonly applied to risk, also reveals empirical deficiencies of expected utility for uncertainty. The Ellsberg paradox reveals deviations from expected utility in a relative, not an absolute, sense, giving within-person comparisons: for some events (ambiguous or otherwise) subjects deviate more from expected utility than for other events. Besides aversion, many other attitudes towards ambiguity are empirically relevant.