Hostname: page-component-8448b6f56d-jr42d Total loading time: 0 Render date: 2024-04-23T16:22:09.408Z Has data issue: false hasContentIssue false
  • English
  • Français

What is partial ambiguity?

Published online by Cambridge University Press:  19 May 2021

Loïc Berger Open the ORCID record for Loïc Berger [Opens in a new window]
Loïc Berger*
Affiliation:
CNRS, IESEG School of Management, Univ. Lille, UMR 9221– LEM, 3 rue de la Digue, F-59000 Lille, France; and Bocconi University, RFF-CMCC European Institute on Economics and the Environment (EIEE), and Centro Euro-Mediterraneo sui Cambiamenti Climatici, Italy
*
Email: l.berger@ieseg.fr.
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper reflects on the notion of partial ambiguity. Using a framework decomposing ambiguity into distinct layers of analysis, among which are risk and model uncertainty, and allowing for different attitudes toward these layers, I show that partial ambiguity may prove less desirable than full ambiguity, even under ambiguity aversion. This observation poses difficulties for interpreting the notion of partial ambiguity in relation to the partial information available to determine the potential compositions of an ambiguous urn. Two Ellsberg-style thought experiments are described to challenge the meaning of partial ambiguity further, and an alternative interpretation, based on a more ambiguous relation, is discussed.

Keywords

Ambiguitymodel uncertaintysmooth ambiguity aversionEllsberg paradoxD81
Type
Article
Information
Economics & Philosophy , Volume 38 , Issue 2 , July 2022 , pp. 206 - 220
Check for updates
Copyright
© The Author(s), 2021. Published by Cambridge University Press

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Arrow, K.J. 1951. Alternative approaches to the theory of choice in risk-taking situations. Econometrica 19, 404–437.CrossRefGoogle Scholar
Aydogan, I., L. Berger, V. Bosetti, and Liu, N. 2020. Three layers of uncertainty and the role of model misspecification. iRisk Working Paper 2020-01, IESEG School of Management.Google Scholar
Berger, L. and Bosetti, V. 2020. Characterizing ambiguity attitudes using model uncertainty. Journal of Economic Behavior and Organization 180, 621–637.CrossRefGoogle Scholar
Cerreia-Vioglio, S., Maccheroni, F., Marinacci, M. and Montrucchio, L. 2013. Classical subjective expected utility. Proceedings of the National Academy of Sciences USA 110, 6754–6759.CrossRefGoogle ScholarPubMed
Chew, S.H., Miao, B. and Zhong, S. 2017. Partial ambiguity. Econometrica 85, 1239–1260.CrossRefGoogle Scholar
Einhorn, H.J. and Hogarth, R.M. 1985. Ambiguity and uncertainty in probabilistic inference. Psychological Review 92, 433.CrossRefGoogle Scholar
Ellsberg, D. 1961. Risk, ambiguity, and the Savage axioms. Quarterly Journal of Economics 75, 643–669.CrossRefGoogle Scholar
Filiz-Ozbay, E., Gulen, H., Masatlioglu, Y. and Ozbay, E. 2020. Comparing ambiguous urns with different sizes. SSRN 3183973. ˜http://econweb.umd.edu/˜masatlioglu/elsberg.pdf.Google Scholar
Hansen, L.P. 2014. Nobel lecture: uncertainty outside and inside economic models. Journal of Political Economy 122, 945–987.CrossRefGoogle Scholar
Hansen, L.P. and Marinacci, M. 2016. Ambiguity aversion and model misspecification: an economic perspective. Statistical Science 31, 511–515.CrossRefGoogle Scholar
Jewitt, I. and Mukerji, S. 2017. Ordering ambiguous acts. Journal of Economic Theory 171, 213–267.CrossRefGoogle Scholar
Keynes, J.M. 1921. A Treatise on Probability. London: Macmillan and Company.Google Scholar
Klibanoff, P., Marinacci, M. and Mukerji, S. 2005. A smooth model of decision making under ambiguity. Econometrica 73, 1849–1892.CrossRefGoogle Scholar
Kops, C. and Pasichnichenko, I. 2020. A test of information aversion. Working paper, Discussion Paper Series / University of Heidelberg. https://doi.org/10.11588/heidok.00028244.CrossRefGoogle Scholar
Marinacci, M. 2015. Model uncertainty. Journal of the European Economic Association 13, 1022–1100.CrossRefGoogle Scholar
Rothschild, M. and Stiglitz, J. 1970. Increasing risk: I. A definition. Journal of Economic Theory 2, 225–243.CrossRefGoogle Scholar
Savage, L. 1954. The Foundations of Statistics. New York, NY: John Wiley & Sons. Second revised edition, 1972.Google Scholar
Schmeidler, D. 1989. Subjective probability and expected utility without additivity. Econometrica 57(3), 571–587.CrossRefGoogle Scholar
Segal, U. (1987). The Ellsberg paradox and risk aversion: an anticipated utility approach. International Economic Review 28, 175–202.CrossRefGoogle Scholar
Seo, K. 2009. Ambiguity and second-order belief. Econometrica 77, 1575–1605.Google Scholar
Shishkin, D. and Ortoleva, P. 2020. Ambiguous information and dilation: an experiment. Technical report, Tech. rep., Mimeo, Princeton University.Google Scholar