Risk, Ambiguity and the Savage Axioms
E564105
"Risk, Ambiguity and the Savage Axioms" is a seminal 1961 paper by Daniel Ellsberg that challenges expected utility theory by demonstrating how people systematically prefer known risks over ambiguous ones, a phenomenon now known as the Ellsberg paradox.
Statements (46)
| Predicate | Object |
|---|---|
| instanceOf |
academic paper
ⓘ
decision theory paper ⓘ economics paper ⓘ |
| argues |
that people treat ambiguity differently from risk
ⓘ
that subjective probabilities may be indeterminate or interval-valued ⓘ |
| author | Daniel Ellsberg NERFINISHED ⓘ |
| citedAs | Ellsberg 1961 ⓘ |
| contribution |
challenged the descriptive validity of Savage’s expected utility axioms
ⓘ
highlighted systematic ambiguity aversion in human choices ⓘ introduced the Ellsberg paradox ⓘ provided experimental-style thought experiments on ambiguity ⓘ stimulated development of non-expected utility models ⓘ |
| describes |
choices between bets with known probabilities and bets with unknown probabilities
ⓘ
thought experiments with urns containing balls of different colors ⓘ |
| examines |
behavioral violations of normative axioms
ⓘ
preferences that cannot be represented by a single expected utility function ⓘ |
| field |
behavioral economics
ⓘ
decision theory ⓘ economics ⓘ probability theory ⓘ |
| hasParadox | Ellsberg paradox NERFINISHED ⓘ |
| influenced |
behavioral economics
ⓘ
models of multiple priors ⓘ non-additive probability models ⓘ prospect theory and related behavioral models ⓘ theory of ambiguity in decision making ⓘ |
| language | English ⓘ |
| mainConcept |
Ellsberg paradox
NERFINISHED
ⓘ
Savage axioms NERFINISHED ⓘ ambiguity aversion ⓘ decision under uncertainty ⓘ expected utility theory ⓘ subjective probability ⓘ |
| publicationYear | 1961 ⓘ |
| relatedTo |
Foundations of Statistics by Leonard J. Savage
NERFINISHED
ⓘ
Knightian uncertainty ⓘ subjective expected utility theory ⓘ |
| shows |
inconsistency with Savage’s subjective expected utility theory
ⓘ
systematic preference for known risks over ambiguous risks ⓘ violations of the sure-thing principle ⓘ |
| status |
classic reference on ambiguity aversion
ⓘ
seminal work in decision theory ⓘ |
| topic |
comparisons of risky and ambiguous lotteries
ⓘ
preference for known risks over ambiguous risks ⓘ subjective probabilities not representable by a single additive measure ⓘ violations of expected utility theory ⓘ |
Referenced by (1)
Full triples — surface form annotated when it differs from this entity's canonical label.