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Analysing Ellsberg’s Paradox by Means of Interval-Probability

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Econometrics in Theory and Practice

Summary

The results reported by Ellsberg (1961) are often considered paradoxical. Indeed they reveal behaviour contrasting the sure-thing principle. An analysis employing modern tools produces two insights: 1) The experimental setting of Ellsberg can be adequately described only by means of interval-probability. 2) The validity of the sure-thing principle is restricted to those situations which can sufficiently be described by classical probability. — In addition Ellsberg’s results indicate a typology of behaviour when knowledge is given by interval-probability.

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References

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Authors and Affiliations

  1. Department of Statistics, Ludwig-Maximilians-Universität München, Germany

    Kurt Weichselberger & Thomas Augustin

Authors
  1. Kurt Weichselberger
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  2. Thomas Augustin
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Editor information

Editors and Affiliations

  1. Department of Economics, Fachhochschule of Munich — University of Applied Sciences, Am Stadtpark 20, D-81243, München, Germany

    Robert Galata

  2. Institute of Statistics, University of Munich, Akademiestr. 1, D-80799, München, Germany

    Helmut Küchenhoff

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© 1998 Physica-Verlag Heidelberg

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Weichselberger, K., Augustin, T. (1998). Analysing Ellsberg’s Paradox by Means of Interval-Probability. In: Galata, R., Küchenhoff, H. (eds) Econometrics in Theory and Practice. Physica-Verlag HD. https://doi.org/10.1007/978-3-642-47027-1_24

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  • DOI: https://doi.org/10.1007/978-3-642-47027-1_24

  • Publisher Name: Physica-Verlag HD

  • Print ISBN: 978-3-642-47029-5

  • Online ISBN: 978-3-642-47027-1

  • eBook Packages: Springer Book Archive

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