In decision theory and economics, ambiguity aversion (also known as uncertainty aversion) is a preference for known risks over unknown risks. An ambiguity-averse individual would rather choose an alternative where the probability distribution of the outcomes is known over one where the probabilities are unknown. This behavior was first introduced through the Ellsberg paradox (people prefer to bet on the outcome of an urn with 50 red and 50 black balls rather than to bet on one with 100 total balls but for which the number of black or red balls is unknown).
There are two categories of imperfectly predictable events between which choices must be made: risky and ambiguous events (also known as Knightian uncertainty). Risky events have a known probability distribution over outcomes while in ambiguous events the probability distribution is not known. The reaction is behavioral and still being formalized. Ambiguity aversion can be used to explain incomplete contracts, volatility in stock markets, and selective abstention in elections (Ghirardato & Marinacci, 2001).
The concept is expressed in the English proverb: "Better the devil you know than the devil you don't."
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and economics, ambiguityaversion (also known as uncertainty aversion) is a preference for known risks over unknown risks. An ambiguity-averse individual...
paradox in his 1961 paper, "Risk, Ambiguity, and the Savage Axioms". It is generally taken to be evidence of ambiguityaversion, in which a person tends to...
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In economics and finance, risk aversion is the tendency of people to prefer outcomes with low uncertainty to those outcomes with high uncertainty, even...
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"better the devil you know than the devil you don't", describing ambiguityaversion. The Devil You Know may refer to: The Devil You Know (film), a 2013...
Tversky and Fox (1995) addressed ambiguityaversion, the idea that people do not like ambiguous gambles or choices with ambiguity, with the comparative ignorance...
psychologically richer theory of the determinants Allais paradox Ambiguityaversion Bayesian probability Behavioral economics Decision theory Generalized...
taxpayers must calculate and pay the greater of the AMT or regular tax. ambiguityaversion Any preference for known risks over unknown risks. American school...
knowledge the same. This difference in treatment is also termed "ambiguityaversion". A black swan event, as analyzed by Nassim Nicholas Taleb, is an...
and complicated that an average person cannot understand it (see ambiguityaversion), so one assumes that those who work on it understand it. However...
and low uncertainty avoidance or the opposite. Ambiguityaversion also known as uncertainty aversion Cross-cultural communication Cross-cultural leadership...
cancer. However, the authors noted that women with a high level of ambiguityaversion were less likely to desire future mammograms and this was especially...
problem in itself. Ellsberg paradox: People exhibit ambiguityaversion (as distinct from risk aversion), in contradiction with expected utility theory. Fenno's...
concerns during the period. This is a list of books about risk issues: Ambiguityaversion Absolute risk Benefit shortfall Civil defence Countermeasure Early...
individuals try to avoid ambiguity and prefer precise over vague information. However, concrete evidence of vagueness aversion has only been proven in...
; Meijers, Huub (April 2009). "Gender Differences in Risk Aversion and AmbiguityAversion" (PDF). Journal of the European Economic Association. 7 (2–3):...
mirror neurons. 1996 – Amos Tversky defined ambiguityaversion, the idea that people do not like ambiguous choices, relating it to comparative ignorance...
Hurwicz decision rule. Other approaches appear in the literature. Ambiguityaversion Robust decision making Imprecise Dirichlet process Kolmogorov, A....
conflict between other, opposing parties. Ellsberg paradox or also ambiguityaversion: The negotiator uses the human bias toward the option they know most...
Strzalecki for "Temporal Resolution of Uncertainty and Recursive Models of AmbiguityAversion". Econometrica. 81 (3): 1039–1074. 2013. doi:10.3982/ECTA9619. 2013:...
assess their loss and gain perspectives in an asymmetric manner (see loss aversion). For example, for some individuals, the pain from losing $1,000 could...
termed anti-Blackness) is characterized by fear of, hatred of or extreme aversion to Black people and Cape Coloureds or Coloureds, and Black & Colored culture...
Origin of Optimism, Loss Aversion and Disappointment Aversion". SSRN 3108432. Dawson C, Johnson SG (8 April 2021). "Dread Aversion and Economic Preferences"...
of relative risk aversion which are not required to be inversely related - a restriction imposed by the constant relative risk aversion utility function...
1049–1074. Maccheroni, F., Marinacci, M., & Rustichini, A. (2006). Ambiguityaversion, robustness, and the variational representation of preferences. Econometrica...
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