A Test of (Weak) Certainty Independence

Christian König-Kersting; Christopher Kops; S.T. Trautmann

doi:10.1016/j.jet.2023.105623

A Test of (Weak) Certainty Independence

Christian König-Kersting^*, Christopher Kops^*, S.T. Trautmann^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

We provide a test of the axioms of certainty and weak certainty independence in models of decision -making under subjective uncertainty. We show that it is through these two weakenings of the classic independence axiom that prominent ambiguity models retain properties that stand in conflict with the ambiguity-sensitive behavior that is revealed in our experiment. Our findings suggest that this conflict may be of a more fundamental nature than what most of these models can accommodate. Our results call for the use of ambiguity models that can accommodate an ambiguity attitude which depends on the chances of winning.

Original language	English
Article number	105623
Journal	Journal of Economic Theory
DOIs	https://doi.org/10.1016/j.jet.2023.105623
Publication status	E-pub ahead of print - 20 Feb 2023

JEL classifications

d81 - Criteria for Decision-Making under Risk and Uncertainty

Keywords

Ellsberg paradox
Ellsberg urn
Machina paradox
certainty independence
weak certainty independence

Access to Document

10.1016/j.jet.2023.105623

Cite this

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abstract = "We provide a test of the axioms of certainty and weak certainty independence in models of decision -making under subjective uncertainty. We show that it is through these two weakenings of the classic independence axiom that prominent ambiguity models retain properties that stand in conflict with the ambiguity-sensitive behavior that is revealed in our experiment. Our findings suggest that this conflict may be of a more fundamental nature than what most of these models can accommodate. Our results call for the use of ambiguity models that can accommodate an ambiguity attitude which depends on the chances of winning.",

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