Abstract
An expected utility maximizer who wishes to establish a choice policy (rather than merely make a single choice) in an Ellsberg urn scenario will have reason to distinguish between urns whose contents are more or less ambiguous. Specifically, risk averters will avoid ambiguity and risk seekers will prefer ambiguity. A resolution of Ellsberg’s paradox is thereby provided, in which ambiguity aversion/seeking is “rational”, but the normative status of expected utility remains unassailed.
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© 1992 Springer Science+Business Media Dordrecht
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Hazen, G.B. (1992). Decision Versus Policy: An Expected Utility Resolution of the Ellsberg Paradox. In: Geweke, J. (eds) Decision Making Under Risk and Uncertainty. Theory and Decision Library, vol 22. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-2838-4_4
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DOI: https://doi.org/10.1007/978-94-011-2838-4_4
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