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Characterization of ambiguity in decision making
Author(s) -
Yates J. Frank,
Zukowski Lisa G.
Publication year - 1976
Publication title -
behavioral science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.371
H-Index - 45
eISSN - 1099-1743
pISSN - 0005-7940
DOI - 10.1002/bs.3830210104
Subject(s) - ambiguity , decision maker , order (exchange) , subjective expected utility , ambiguity aversion , psychology , computer science , social psychology , expected utility hypothesis , mathematical economics , mathematics , economics , operations research , programming language , finance
This article concerns the decision making process in individual human organisms. Ambiguity is a type of uncertainty resulting from the decision maker possessing vague information about the chances of various events occurring. This study tested an hypothesis concerning how ambiguity is characterized or encoded subjectively. Subjects were presented with games intended to induce subjective second order probability distributions over the chances of winning $1.00. Under the assumption that ambiguity is avoided, subjects' preferences among the game implied that ambiguity cannot be fully characterized by the ranges of subjective second order probability distributions. Avenues for pursuing alternative encoding explanations are discussed, also.