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Recent developments in modeling preferences: Uncertainty and ambiguity
 Colin Camerer,
 Martin Weber
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In subjective expected utility (SEU), the decision weights people attach to events are their beliefs about the likelihood of events. Much empirical evidence, inspired by Ellsberg (1961) and others, shows that people prefer to bet on events they know more about, even when their beliefs are held constant. (They are averse to ambiguity, or uncertainty about probability.) We review evidence, recent theoretical explanations, and applications of research on ambiguity and SEU.
Thanks to Jonathan Baron, James Dow, Peter Fishburn, Itzhak Gilboa, Gordon Hazen, Howard Kunreuther, Tomas Phillipson, David Schmeidler, Amos Tversky, the editor, and several anonymous referees for corrections and helpful comments. Camerer's contribution to this work was supported by the National Science Foundation, grant no. SES 8809299. Weber's contribution was supported by the Deutsche Forschungsgemeinschaft, grant no. WE 993/51.
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 Title
 Recent developments in modeling preferences: Uncertainty and ambiguity
 Journal

Journal of Risk and Uncertainty
Volume 5, Issue 4 , pp 325370
 Cover Date
 19921001
 DOI
 10.1007/BF00122575
 Print ISSN
 08955646
 Online ISSN
 15730476
 Publisher
 Kluwer Academic Publishers
 Additional Links
 Topics
 Keywords

 ambiguity
 uncertainty
 Ellsberg paradox
 nonexpected utility
 Industry Sectors
 Authors

 Colin Camerer ^{(1)}
 Martin Weber ^{(2)}
 Author Affiliations

 1. Graduate School of Business, University of Chicago, 60637, Chicago, IL
 2. Lehrstuhl fur Allg. Betriebswirtschaftslehre und Entscheidungsforschung, ChristianAlbrechtsUniversitat, Olshausenstr. 2040, 2300, Kiel, Germany