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Measuring the Degree of Ambiguity about Probability: Experimental Evidence

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  • Andrea Morone
  • Ozlem Ozdemir

Abstract

Different from previous studies that use a best estimate, interval, or sets of probabilities, we represent the degree of ambiguity through levels of information provided to subjects. The willingness to pay is higher when more amount of information is provided.

Suggested Citation

  • Andrea Morone & Ozlem Ozdemir, 2005. "Measuring the Degree of Ambiguity about Probability: Experimental Evidence," Papers on Strategic Interaction 2005-40, Max Planck Institute of Economics, Strategic Interaction Group.
    • Handle: RePEc:esi:discus:2005-40
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    File URL: ftp://papers.econ.mpg.de/esi/discussionpapers/2005-40.pdf
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    References listed on IDEAS

    as
    1. Carmela Di Mauro & Anna Maffioletti, 2004. "Attitudes to risk and attitudes to uncertainty: experimental evidence," Applied Economics, Taylor & Francis Journals, vol. 36(4), pages 357-372.
    2. Carmela Di Mauro & Anna Maffioletti, 2001. "The Valuation of Insurance under Uncertainty: Does Information about Probability Matter?," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 26(3), pages 195-224, December.
    3. Highhouse, Scott, 1994. "A verbal protocol analysis of choice under ambiguity," Journal of Economic Psychology, Elsevier, vol. 15(4), pages 621-635, December.
    4. Hogarth, Robin M & Kunreuther, Howard, 1989. "Risk, Ambiguity, and Insurance," Journal of Risk and Uncertainty, Springer, vol. 2(1), pages 5-35, April.
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    More about this item

    Keywords

    experiments; ambiguity; uncertainty; probability;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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