Learning about the Ellsberg Paradox reduces, but does not abolish, ambiguity aversion.

ABSTRACT: Ambiguity aversion-the tendency to avoid options whose outcome probabilities are unknown-is a ubiquitous phenomenon. While in some cases ambiguity aversion is an adaptive strategy, in many situations it leads to suboptimal decisions, as illustrated by the famous Ellsberg Paradox. Behavioral interventions for reducing ambiguity aversion should therefore be of substantial practical value. Here we test a simple intervention, aimed at reducing ambiguity aversion in an experimental design, where aversion to ambiguity leads to reduced earnings. Participants made a series of choices between a reference lottery with a 50% chance of winning $5, and another lottery, which offered more money, but whose outcome probability was either lower than 50% (risky lottery) or not fully known (ambiguous lottery

SUBMITTER: Jia R 

PROVIDER: S-EPMC7055742 | biostudies-literature | 2020

REPOSITORIES: biostudies-literature