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Betting on Machina's reflection example : an Experiment on Ambiguity

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Abstract

In a recent paper, Machina (2008) suggested choice problems in the spirit of Ellsberg (1961) which challenge tail-separability, an implication of Choquet Expected Utility (CEU) to a similar extent as the Ellsberg paradox challenged the sure-thing principle implied by Subjective Expected Utility (SEU). We have tested choice behavior for bets on one of Machina's choice problems, the reflection example. Our results indicate that tail-separability is violated by a large majority of subjects (over 70% of the sample). These empirical findings complement the theoretical analysis of Machina (2008) and, together, they confirm the need for new approaches in the analysis of ambiguity for decision making.
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Dates and versions

hal-00580032 , version 1 (25-03-2011)

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  • HAL Id : hal-00580032 , version 1

Cite

Olivier L'Haridon, Laetitia Placido. Betting on Machina's reflection example : an Experiment on Ambiguity. 2008. ⟨hal-00580032⟩
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