Ambiguous correlation

Larry G. Epstein; Yoram Halevy

doi:10.1093/restud/rdy008

Ambiguous correlation

Larry G. Epstein
, Yoram Halevy

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

32 Scopus citations

Abstract

Many decisions are made in environments where outcomes are determined by the realization of multiple random events. A decision maker may be uncertain how these events are related. We identify and experimentally substantiate behaviour that intuitively reflects a lack of confidence in their joint distribution. Our findings suggest a dimension of ambiguity which is different from that in the classical distinction between risk and “Knightian uncertainty”.

Original language	English
Pages (from-to)	668-693
Number of pages	26
Journal	Review of Economic Studies
Volume	86
Issue number	2
DOIs	https://doi.org/10.1093/restud/rdy008
State	Published - 1 Mar 2019
Externally published	Yes

Bibliographical note

Publisher Copyright:
© The Author(s) 2018. Published by Oxford University Press on behalf of The Review of Economic Studies Limited.

Keywords

Ambiguity
Confidence
Correlation neglect
Ellsberg Paradox
Preference elicitation

Access to Document

10.1093/restud/rdy008

Cite this

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KW - Confidence

KW - Correlation neglect

KW - Ellsberg Paradox

KW - Preference elicitation

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Ambiguous correlation

Abstract

Bibliographical note

Keywords

Access to Document

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