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Handbook of the Economics of Risk and Uncertainty
book

Handbook of the Economics of Risk and Uncertainty

by Mark Machina, W. Kip Viscusi
November 2013
Beginner content levelBeginner
896 pages
35h 10m
English
North Holland
Content preview from Handbook of the Economics of Risk and Uncertainty
Ambiguity and Ambiguity Aversion
745
Ellsberg’s report of a wide range of views on these issues played out in the subse-
quent literature. Whether or not he had any intuitive tendency for violation, Raiffa
(1961) offered what has come to be the standard argument to an individual who would
make the typical choices in the Three-Color Urn: If you really prefer a
1
over a
2
and a
4
over a
3
, then you presumably prefer a 50:50 coin flip of a
1
:a
4
versus a 50:50 coin flip
of a
2
:a
3
. But both coin flips reduce to a purely objective 50:50 coin flip of $100:$0. In
Raiffa’s view, “Something must give!” (1961, p.694)
Others have expressed a variety of views. Although ...
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Publisher Resources

ISBN: 9780444536853