A Solution to Ellsberg's Paradox

2018 ◽  
Author(s):  
Gabriel Frahm
Keyword(s):  
Ellsberg’S Paradox

scholarly journals ELLSBERG’S PARADOX AND THE VALUE OF CHANCES

2015 ◽  
Vol 32 (2) ◽  
pp. 231-248 ◽  
Author(s):  
Richard Bradley
Keyword(s):  
Decision Theory ◽  
Risk Aversion ◽  
Marginal Utility ◽  
Bayesian Decision Theory ◽  
Ellsberg Paradox ◽  
Bayesian Decision ◽  
Uncertainty Aversion ◽  
Von Neumann ◽  
Diminishing Marginal Utility ◽  
Ellsberg’S Paradox

Abstract:What value should we put on our chances of obtaining a good? This paper argues that, contrary to the widely accepted theory of von Neumann and Morgenstern, the value of a chance of some good G may be a non-linear function of the value of G. In particular, chances may have diminishing marginal utility, a property that is termed chance uncertainty aversion. The hypothesis that agents are averse to uncertainy about chances explains a pattern of preferences often observed in the Ellsberg paradox. While these preferences have typically been taken to refute Bayesian decision theory, it is shown that chance risk aversion is perfectly compatible with it.

Beyond Ellsberg's paradox

2001 ◽  
Vol 111 (1) ◽  
pp. 7
Author(s):  
David V. Budescu ◽  
Kristine M. Kuhn ◽  
Karen M. Kramer
Keyword(s):  
Ellsberg’S Paradox

Exploring Ellsberg’s Paradox in Vague-Vague Cases

2007 ◽  
pp. 131-154 ◽  
Author(s):  
Karen M. Kramer ◽  
David V. Budescu
Keyword(s):  
Ellsberg’S Paradox

scholarly journals An interpretation of Ellsberg’s Paradox based on information and incompleteness

2013 ◽  
Vol 1 (2) ◽  
pp. 139-144 ◽  
Author(s):  
Luciano I. De Castro ◽  
Nicholas C. Yannelis
Keyword(s):  
Ellsberg’S Paradox
Sign in / Sign up

Export Citation Format

Share Document