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Experimental Business Research pp 131–154Cite as

Exploring Ellsberg’s Paradox in Vague-Vague Cases

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Abstract

We explore a generalization of Ellsberg’s paradox to the Vague-Vague (V-V) case, where neither of the probabilities (urns) is specified precisely, but one urn is always more precise than the other. We present results of an experiment explicitly designed to study this situation. The paradox was as prevalent in the V-V cases, as in the standard Precise-Vague (P-V) cases. The paradox occurred more often when differences between ranges of vagueness were large. Vagueness avoidance increased with midpoint for P-V cases, and decreased for V-V cases. Models that capture the relationships between vagueness avoidance and observable gamble characteristics (e.g., differences of ranges) were fitted.

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Author information

Authors and Affiliations

  1. Edward Hines Jr. Veterans Administration Medical Center, Hines, IL

    Karen M. Kramer

  2. University of Illinois, Urbana-Champaign, IL

    David V. Budescu

Authors
  1. Karen M. Kramer
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  2. David V. Budescu
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Editor information

Editors and Affiliations

  1. Department of Marketing, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong

    Rami Zwick

  2. Department of Management and Policy, University of Arizona, Tucson, AZ, 85721

    Amnon Rapoport

  3. Department of Economics, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong

    Amnon Rapoport

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© 2005 Springer

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Kramer, K.M., Budescu, D.V. (2005). Exploring Ellsberg’s Paradox in Vague-Vague Cases. In: Zwick, R., Rapoport, A. (eds) Experimental Business Research. Springer, Boston, MA. https://doi.org/10.1007/0-387-24244-9_6

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