The Effect of Learning on Ambiguity Attitudes

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dc.authoridBaillon, Aurélien/0000-0002-0169-9760|L'Haridon, Olivier/0000-0001-8786-4765
dc.authorwosidBaillon, Aurélien/E-6961-2012
dc.authorwosidL'Haridon, Olivier/GYU-3062-2022
dc.contributor.authorBaillon, Aurelien
dc.contributor.authorBleichrodt, Han
dc.contributor.authorKeskin, Umut
dc.contributor.authorl'Haridon, Olivier
dc.contributor.authorLi, Chen
dc.date.accessioned2024-07-18T20:49:04Z
dc.date.available2024-07-18T20:49:04Z
dc.date.issued2018
dc.departmentİstanbul Bilgi Üniversitesien_US
dc.description.abstractThis paper studies the effect of learning information on people's attitudes toward ambiguity. We propose a method to separate ambiguity attitudes from subjective probabilities and to decompose ambiguity attitudes into two components. Under models like prospect theory that represent ambiguity through nonadditive decision weights, these components reflect pessimism and likelihood insensitivity. Under multiple priors models, they reflect ambiguity aversion and perceived ambiguity. We apply our method in an experiment where we elicit the ask prices of options with payoffs depending on the returns of initial public offerings (IPOs) on the New York Stock Exchange. IPOs are a natural context to study the effect of learning, as prior information about their returns is unavailable. Subjects perceived substantial ambiguity and they were insensitive to likelihood information. We observed only little pessimism and ambiguity aversion. Subjective probabilities were well calibrated and close to the true frequencies. Subjects' behavior moved toward expected utility with more information, but substantial deviations remained even in the maximum information condition.en_US
dc.description.sponsorshipNetherlands Organization for Scientific Research (NWO) [451-10-011, 453-06-001]; Institut Universitaire de France; Rennes Metropole district AIS-2013en_US
dc.description.sponsorshipThe research of A. Baillon and H. Bleichrodt was made possible by grants from the Netherlands Organization for Scientific Research (NWO) [Grant 451-10-011 (to Baillon) and Grant 453-06-001 (to Bleichrodt)]. O. l'Haridon's research was supported by grants from the Institut Universitaire de France and Rennes Metropole district AIS-2013.en_US
dc.identifier.doi10.1287/mnsc.2016.2700
dc.identifier.endpage2198en_US
dc.identifier.issn0025-1909
dc.identifier.issn1526-5501
dc.identifier.issue5en_US
dc.identifier.scopus2-s2.0-85029157818en_US
dc.identifier.scopusqualityQ1en_US
dc.identifier.startpage2181en_US
dc.identifier.urihttps://doi.org/10.1287/mnsc.2016.2700
dc.identifier.urihttps://hdl.handle.net/11411/8062
dc.identifier.volume64en_US
dc.identifier.wosWOS:000439102900012en_US
dc.identifier.wosqualityQ1en_US
dc.indekslendigikaynakWeb of Scienceen_US
dc.indekslendigikaynakScopusen_US
dc.language.isoenen_US
dc.publisherInformsen_US
dc.relation.ispartofManagement Scienceen_US
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanıen_US
dc.rightsinfo:eu-repo/semantics/closedAccessen_US
dc.subjectAmbiguityen_US
dc.subjectLearningen_US
dc.subjectUpdatingen_US
dc.subjectNeo-Additive Weightingen_US
dc.subjectProspect-Theoryen_US
dc.subjectExpected Utilityen_US
dc.subjectSubjective-Probabilityen_US
dc.subjectDecisionen_US
dc.subjectRisken_US
dc.subjectUncertaintyen_US
dc.subjectChoiceen_US
dc.subjectModelen_US
dc.subjectRepresentationen_US
dc.subjectExpectationsen_US
dc.titleThe Effect of Learning on Ambiguity Attitudes
dc.typeArticle

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