Much of the evidence supporting the Ellsberg paradox comes from experiments on individual choice and judgement. In this study, we test whether, in market experiments, there is a tendency for anomalous behaviour to disappear or to be reduced as a consequence of market experience and feedback. The empirical validity of this assumption is assessed by running an auction market for the sale of both risky and uncertain prospects. We conclude that, with the repetition of the market experience, individual bids converge towards behaviour consistent with subjective expected utility.

Do individual violations of subjective expected utility persist in markets? Insights from an experiment

MAFFIOLETTI, Anna;
2003

Abstract

Much of the evidence supporting the Ellsberg paradox comes from experiments on individual choice and judgement. In this study, we test whether, in market experiments, there is a tendency for anomalous behaviour to disappear or to be reduced as a consequence of market experience and feedback. The empirical validity of this assumption is assessed by running an auction market for the sale of both risky and uncertain prospects. We conclude that, with the repetition of the market experience, individual bids converge towards behaviour consistent with subjective expected utility.
ambiguity; Markets; Ellsberg Paradox.
A.Maffioletti;C.DiMauro
File in questo prodotto:
File Dimensione Formato  
paperRES2003.pdf

embargo fino al 17/11/2012

Tipo di file: POSTPRINT (VERSIONE FINALE DELL’AUTORE)
Dimensione 110.38 kB
Formato Adobe PDF
110.38 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/2318/124581
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact