“Partial Ambiguity” by Chew Soo Hong
Economics Seminar
Author:
Chew Soon Hong
National University of SingaporeMiao Bin
Shanghai University of Finance and EconomicsZhong Songfa
National University of Singapore
We examine experimentally attitude towards partial ambiguity. One form called interval ambiguity involves a symmetric range of possible compositions. Another called disjoint ambiguity, consisting of a union of two disjoint intervals of possible compositions, is complementary to interval ambiguity. The third called two-point ambiguity involves either n or 100 – n cards red with the rest of the cards black. Each form of partial ambiguity may be viewed as a two-stage lottery with a symmetrically distributed prior. Experiment 1 studies attitudes toward these three forms of partial ambiguity. Experiment 2 studies attitude towards the orresponding compound risks with uniform stage-1 probabilities. Experiment 3 combines experiments 1 and 2 in a within-subject design and studies potential connections between attitude towards partial ambiguity and attitude towards uniform compound risks. This paper contributes to broadening the range of observed choice behavior and testing of decision making odels beyond pure risk and full ambiguity.
