
Mark J. Machina and Marciano Siniscalchi
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13.1 INTRODUCTION
Almost by its very nature, the phenomenon of uncertainty is ill-defined. Economists (and
many others) agree that the uncertainty inherent in the flip of a fair coin, the uncertainty
inherent in a one-shot horse race, and even the uncertainty inherent in the lack of knowl-
edge of a deterministic fact (such as the 1,000,000
th
digit of π) are different notions,
which may have different economic implications. Of the different forms of uncertainty,
the phenomenon of ambiguity, and agents’ attitudes toward it, is the most ill-defined.
The use of the term “ambiguity” to describe a particular ...