Attitudes to uncertainty in a strategic setting

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Attitudes to uncertainty in a strategic setting. / Li, Zhihua; Loomes, Graham; Pogrebna, Ganna.

In: The Economic Journal, Vol. 127, No. 601, 24.05.2017, p. 809-826.

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Li, Zhihua ; Loomes, Graham ; Pogrebna, Ganna. / Attitudes to uncertainty in a strategic setting. In: The Economic Journal. 2017 ; Vol. 127, No. 601. pp. 809-826.

Bibtex

@article{0c9d12d2d0f04ab5a1a1177848e93574,
title = "Attitudes to uncertainty in a strategic setting",
abstract = "Much uncertainty in life relates to the behaviour of others in interactive environments. This article tests some implications of subjective expected utility theory (Savage, 1954) in an experimental strategic setting where there is uncertainty about the actions of other players. In this environment, a large majority of our participants violate subjective expected utility theory. However, they do not exhibit the sorts of consistent {\textquoteleft}attitude to ambiguity{\textquoteright} found in individual decision experiments. We discuss three possible explanations of their behaviour: non-linear transformation of probabilities; noise in responses; and/or systematic biases in the way that individuals generate subjective probabilities.",
author = "Zhihua Li and Graham Loomes and Ganna Pogrebna",
year = "2017",
month = may,
day = "24",
doi = "10.1111/ecoj.12486",
language = "English",
volume = "127",
pages = "809--826",
journal = "The Economic Journal",
issn = "0013-0133",
publisher = "Wiley",
number = "601",

}

RIS

TY - JOUR

T1 - Attitudes to uncertainty in a strategic setting

AU - Li, Zhihua

AU - Loomes, Graham

AU - Pogrebna, Ganna

PY - 2017/5/24

Y1 - 2017/5/24

N2 - Much uncertainty in life relates to the behaviour of others in interactive environments. This article tests some implications of subjective expected utility theory (Savage, 1954) in an experimental strategic setting where there is uncertainty about the actions of other players. In this environment, a large majority of our participants violate subjective expected utility theory. However, they do not exhibit the sorts of consistent ‘attitude to ambiguity’ found in individual decision experiments. We discuss three possible explanations of their behaviour: non-linear transformation of probabilities; noise in responses; and/or systematic biases in the way that individuals generate subjective probabilities.

AB - Much uncertainty in life relates to the behaviour of others in interactive environments. This article tests some implications of subjective expected utility theory (Savage, 1954) in an experimental strategic setting where there is uncertainty about the actions of other players. In this environment, a large majority of our participants violate subjective expected utility theory. However, they do not exhibit the sorts of consistent ‘attitude to ambiguity’ found in individual decision experiments. We discuss three possible explanations of their behaviour: non-linear transformation of probabilities; noise in responses; and/or systematic biases in the way that individuals generate subjective probabilities.

U2 - 10.1111/ecoj.12486

DO - 10.1111/ecoj.12486

M3 - Article

VL - 127

SP - 809

EP - 826

JO - The Economic Journal

JF - The Economic Journal

SN - 0013-0133

IS - 601

ER -