Hedging, ambiguity, and the reversal of order axiom

• Verfasst von: Oechssler, Joerg [VerfasserIn]
• Verfasst von: Rau, Hannes [VerfasserIn]
• Verfasst von: Roomets, Alex [VerfasserIn]
• Titel: Hedging, ambiguity, and the reversal of order axiom
• Verf.angabe: Jörg Oechssler, Hannes Rau, Alex Roomets
• E-Jahr: 2019
• Jahr: 26 July 2019
• Umfang: 8 S.
• Teil: volume:117
• Teil: year:2019
• Teil: pages:380-387
• Teil: extent:8
• Fussnoten: Gesehen am 02.09.2019
• Titel Quelle: Enthalten in: Games and economic behavior
• Ort Quelle: Amsterdam [u.a.] : Elsevier, 1989
• Jahr Quelle: 2019
• Band/Heft Quelle: 117(2019), Seite 380-387
• ISSN Quelle: 1090-2473
• DOI: doi:10.1016/j.geb.2019.07.007
• Datenträger: Online-Ressource
• Sprache: eng
• Bibliogr. Hinweis: Erscheint auch als : Druck-Ausgabe: Oechssler, Joerg: Hedging, ambiguity, and the reversal of order axiom. - 2019
• Bibliogr. Hinweis: Forschungsdaten: Oechssler, Joerg: Hedging, ambiguity, and the reversal of order axiom [dataset]
• Sach-SW: Ellsberg paradox
• Sach-SW: Experiment
• Sach-SW: Hedging
• Sach-SW: Reversal of order axiom
• K10plus-PPN: 1675670129

Abstract

We ran experiments that gave subjects a straight-forward and simple opportunity to hedge away ambiguity in an Ellsberg-style experiment. Subjects had to make bets on the combined outcomes of a fair coin and a draw from an ambiguous urn. By modifying the timing of the draw, coin flip, and decision, we are able to test the reversal-of-order axiom. Our main result is that the reversal-of-order axiom seems to hold. We also confirm low levels of ambiguity hedging despite the relative obviousness of the opportunity.