The Discounting of Ambiguous Information in Economic Decision Making

E. van Dijk, M. Zeelenberg

    Research output: Contribution to journalArticleScientificpeer-review

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    Abstract

    In three experimental studies we investigated how decision makers respond to ambiguous information about costs and benefits. In Experiment 1, we studied the effect of ambiguity about prior costs. Experiments 2 and 3 focused on the effect of ambiguity about future outcomes. The collective results of the three studies suggest that decision makers discount ambiguous information. The findings are related to insights on the disjunction effect, the sunk cost effect, transaction decoupling, and ambiguity aversion.
    Original languageEnglish
    Pages (from-to)341-352
    JournalJournal of Behavioral Decision Making
    Volume16
    Issue number5
    Publication statusPublished - 2003

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    decision making
    Cost-Benefit Analysis
    economics
    decision maker
    costs
    experiment
    transaction
    Discounting
    Economics
    Decision making
    Decision Making
    Costs
    Decision maker
    Experiment
    Decoupling
    Information costs
    Costs and benefits
    Experimental study
    Discount
    Sunk costs

    Cite this

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    abstract = "In three experimental studies we investigated how decision makers respond to ambiguous information about costs and benefits. In Experiment 1, we studied the effect of ambiguity about prior costs. Experiments 2 and 3 focused on the effect of ambiguity about future outcomes. The collective results of the three studies suggest that decision makers discount ambiguous information. The findings are related to insights on the disjunction effect, the sunk cost effect, transaction decoupling, and ambiguity aversion.",
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    The Discounting of Ambiguous Information in Economic Decision Making. / van Dijk, E.; Zeelenberg, M.

    In: Journal of Behavioral Decision Making, Vol. 16, No. 5, 2003, p. 341-352.

    Research output: Contribution to journalArticleScientificpeer-review

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    AB - In three experimental studies we investigated how decision makers respond to ambiguous information about costs and benefits. In Experiment 1, we studied the effect of ambiguity about prior costs. Experiments 2 and 3 focused on the effect of ambiguity about future outcomes. The collective results of the three studies suggest that decision makers discount ambiguous information. The findings are related to insights on the disjunction effect, the sunk cost effect, transaction decoupling, and ambiguity aversion.

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