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Reference dependence in the face of ambiguity: Trading lottery tickets and probabilistic information - Couverture souple

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9783639227468: Reference dependence in the face of ambiguity: Trading lottery tickets and probabilistic information
Couverture souple
ISBN 10 : 3639227468 ISBN 13 : 9783639227468
Editeur : VDM Verlag Dr. Müller, 2010

Synopsis

Most real life decisions are taken without information about the probabilities associated with future outcomes; that is, ambiguity. Take, for example, choosing between different financial products. While for some of these products the probabilities associated with future rewards can be computed from past performance, these data are unlikely to be available for newly listed financial stock or when past performance is not a reliable indicator of the future. Research has shown that individuals have a tendency to prefer having to not having probabilistic information. In turn, it has been suggested that individuals are willing to pay to acquire ambiguity reducing information. This work explores factors that affect this pattern of results: endowment and reference dependence. We experimentally show that when individuals are endowed with ambiguous prospects they do not want to exchange them for unambiguous counterparts (unless there is a premium to do so), this invalidating the prediction that they are willing to pay to reduce ambiguity. The studies have important implications in the field of decision making under uncertainty, in the interface between psychology and economics.

Les informations fournies dans la section « Synopsis » peuvent faire référence à une autre édition de ce titre.

Présentation de l'éditeur

Most real life decisions are taken without information about the probabilities associated with future outcomes; that is, ambiguity. Take, for example, choosing between different financial products. While for some of these products the probabilities associated with future rewards can be computed from past performance, these data are unlikely to be available for newly listed financial stock or when past performance is not a reliable indicator of the future. Research has shown that individuals have a tendency to prefer having to not having probabilistic information. In turn, it has been suggested that individuals are willing to pay to acquire ambiguity reducing information. This work explores factors that affect this pattern of results: endowment and reference dependence. We experimentally show that when individuals are endowed with ambiguous prospects they do not want to exchange them for unambiguous counterparts (unless there is a premium to do so), this invalidating the prediction that they are willing to pay to reduce ambiguity. The studies have important implications in the field of decision making under uncertainty, in the interface between psychology and economics.

Les informations fournies dans la section « A propos du livre » peuvent faire référence à une autre édition de ce titre.

Éditeur
VDM Verlag Dr. Müller
Date d'édition
2010
Langue
anglais
ISBN 10 
3639227468
ISBN 13 
9783639227468
Reliure
Broché
Nombre de pages
232
Coordonnées du fabricant
non disponible
Personne responsable
non disponible