The Price for Information about Probabilities and its Relation with Capacities

Attanasi, Giuseppe Marco and Montesano, Aldo (2010) The Price for Information about Probabilities and its Relation with Capacities. TSE Working Paper, n. 10-193

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Official URL: http://tse-fr.eu/pub/23343

Abstract

In this paper ambiguity aversion is measured through the maximum price the decision maker is willing to pay in order to know the probability of an event. Two comparative problems are examined in which the decision maker faces an act: in one case buying
information implies playing a lottery, while in the other case buying information gives also the option to avoid playing the lottery. In both decision settings, relying on Choquet expected utility model, we study how the decision maker’s risk and ambiguity attitudes affect the reservation price for information. These effects are analyzed for different levels of ambiguity of the act.

Item Type: Monograph (Working Paper)
Language: English
Date: September 2010
Uncontrolled Keywords: Ambiguity aversion, Choquet expected utility, Information about probabilities
JEL codes: C91 - Laboratory, Individual Behavior
D81 - Criteria for Decision-Making under Risk and Uncertainty
D83 - Search; Learning; Information and Knowledge; Communication; Belief
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 18 Jan 2012 06:02
Last Modified: 07 Mar 2018 13:22
OAI ID: oai:tse-fr.eu:23343
URI: http://publications.ut-capitole.fr/id/eprint/3458

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