Abstract
This chapter reviews the experimental literature on ambiguity attitudes, focusing on three topics. First, it considers various approaches to operationalize ambiguity in experiments. Second, the chapter reviews basic findings in the field regarding the prevalence of ambiguity aversion and ambiguity seeking in static individual decision situations. Third, it looks at studies that probe the external validity of these basic results. Finally, the chapter summarizes the limited evidence on the link between experimental measures of ambiguity attitude and people's decisions in the field. The chapter considers only experimental work on ambiguity attitude, complementing a few review articles mostly focusing on theoretical work. Evidence on home bias and source preference is also discussed. The chapter highlights that the review of potential moderators of ambiguity attitude, the underlying psychological mechanisms, and its relation to behavior outside the laboratory, revealed mixed results.
| Original language | English |
|---|---|
| Title of host publication | The Wiley Blackwell Handbook of Judgment and Decision Making |
| Editors | Gideon Keren, George Wu |
| Place of Publication | Chichester |
| Publisher | John Wiley & Sons Ltd |
| Pages | 89-116 |
| ISBN (Print) | 9781118468395 |
| DOIs | |
| Publication status | Published - 2015 |
Keywords
- ambiguity attitudes
- ambiguity aversion
- ambiguity seeking
- home bias
- individual decision situations