Please use this identifier to cite or link to this item: https://repositorio.insper.edu.br/handle/11224/3977
Type: Artigo Científico
Title: Ignorance and competence in choices under uncertainty
Author: Casaca, Paulo
Chateauneuf, Alain
Faro, José Heleno
Publication Date: 2014
Original Abstract: We propose a model of decision making that captures reluctance to bet when the decision maker (DM) perceives that she lacks adequate information or expertise about the underlying contingencies. On the other hand, the same DM can prefer to bet in situations where she feels specially knowledgeable or competent even if the underlying contingencies have vague likelihoods. This separation in terms of sources of uncertainty is motivated by the Heath and Tversky’s competence hypothesis as well as by the Fox and Tversky’s comparative ignorance effect. Formally, we characterize preference relations % over Anscombe – Aumann acts represented by J (f) = min p∈C  A u(f)dp + max p∈C A c u(f)dp, where u is an affine utility index on consequences, C is a nonempty, convex and (weak∗ ) compact subset of probabilities measures, and A is a referential chance event. In this model there is a clear separation of ambiguity attitudes. The case E ⊂ A captures possible familiar target events while the case E ⊂ A c might refer to the case of relative ignorance concerning related contingencies. This model captures a special case of event dependence of ambiguity attitudes in which the well known maxmin model is a special case. We also characterize the case where we have a Choquet Expected Utility representation. Journal of Economic Literature Classification Number: D81.
Keywords in original language : Ambiguity
Competence hypothesis
Comparative ignorance effect
Maxmin preferences
Choquet expected utility
Language: Inglês
CNPq Area: Ciências Sociais Aplicadas
URI: https://www.sciencedirect.com/science/article/pii/S0304406814000330?via%3Dihub
Copyright: O INSPER E ESTE REPOSITÓRIO NÃO DETÊM OS DIREITOS DE USO E REPRODUÇÃO DOS CONTEÚDOS AQUI REGISTRADOS. É RESPONSABILIDADE DOS USUÁRIOS INDIVIDUAIS VERIFICAR OS USOS PERMITIDOS NA FONTE ORIGINAL, RESPEITANDO-SE OS DIREITOS DE AUTOR OU EDITOR
Appears in Collections:Coleção de Artigos Científicos

Files in This Item:
File Description SizeFormat 
R_Artigo_2014_Ignorance and competence in choices under uncertaint_TC.pdfR_Artigo_2014_Ignorance and competence in choices under uncertaint_TC425.64 kBAdobe PDFView/Open

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.