The ambiguity effect is a cognitive bias in which decision-making suffers due to lack of information or ambiguity. The effect suggests that people tend to choose a solution for which the probability of a favorable outcome is known, compared to a solution where the probability of a favorable outcome is unknown [1] . The effect was discovered by Daniel Ellsberg in 1961. Ellsberg's experiments showed that for many people, risk (known probability) and uncertainty (unknown probability) are two different concepts [2] .
Ellsberg's examples show problems with the Savage concept, which allows one to work with uncertainty as well as risk, replacing objective probabilities with subjective probabilities [2] .
Content
- 1 The task of "two ballot boxes" (Ellsberg)
- 2 The task "with one urn" (Ellsberg)
- 3 Explanation
- 4 See also
- 5 notes
- 6 Literature
- 7 References
The Two Litter Challenge (Ellsberg)
There are two ballot boxes, each of which has a total of 100 red and black balls. In the first urn there are 50 red and 50 black balls. The number of black (and, accordingly, red) balls in the second urn is unknown. One ball is randomly removed from each urn. The experiment participant is asked to choose a ballot box and bet on the color of the ball. In the case of guessing, he gets $ 100, and in the case of losing - he does not lose anything. During the experiment, it turned out that people tend to choose the first urn, where the probability of winning (and the risk of losing) is determined, and avoid the uncertain risk associated with choosing the second urn. When providing ballot boxes individually, the subjects did not give preference to any color [1] [2] .
One-Urn Challenge (Ellsberg)
There is one urn in which there are 30 red balls and 60 black and yellow balls in an unknown ratio. One ball is taken out of the urn, and the participant is asked if he puts (1) on the red ball or (2) on the black one? Under the same conditions, one can ask another question: should I put (3) on red or yellow or (4) black or yellow? The most common answers are: 1 and 4 [1] .
Explanation
One possible explanation is that people use a heuristic rule to avoid options in which information is missing [3] [4] .
See also
- Unacceptance of Uncertainty
- Risk aversion
Notes
- ↑ 1 2 3 Ellsberg, 1961 .
- ↑ 1 2 3 Halevy, Feltkamp, 2005 .
- ↑ Frisch, Baron, 1988 .
- ↑ Ritov, Baron, 1990 .
Literature
- Daniel Ellsberg. Risk, ambiguity, and the Savage axioms // Quarterly Journal of Economics. - 1961. - T. 75 , No. 4 . - P. 643-669. - DOI : 10.2307 / 1884324 .
- Frisch, D., Baron, J. Ambiguity and rationality // Journal of Behavioral Decision Making. - 1988. - No. 1 . - S. 149-157 .
- Ritov, I., Baron, J. Reluctance to vaccinate: omission bias and ambiguity // Journal of Behavioral Decision Making. - 1990. - No. 3 . - P. 263-277.
- Pete C. Trimmer et al. Decision-making under uncertainty: biases and Bayesians // Animal Cognition. - 2011. - T. 14 , No. 4 . - P. 465-476. - ISSN 1435-9448 . - DOI : 10.1007 / s10071-011-0387-4 .
- Yoram Halevy, Vincent Feltkamp. A Bayesian Approach to Uncertainty Aversion // Review of Economic Studies. - 2005. - T. 72 , No. 2 . - P. 449-466. - DOI : 10.1111 / j.1467-937X.2005.00339.x .
Links
- The Savage theorem and the Ellsberg paradox (site based on material from Eliezer Yudkowski )