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Stake effects on ambiguity attitudes for gains and losses
[journal article]
Abstract We test the effect of stake size on ambiguity attitudes. Compared to a baseline condition, we find subjects to be more ambiguity seeking for small-probability gains and large-probability losses under high stakes. They are also more ambiguity averse for large-probability gains and small-probability l... view more
We test the effect of stake size on ambiguity attitudes. Compared to a baseline condition, we find subjects to be more ambiguity seeking for small-probability gains and large-probability losses under high stakes. They are also more ambiguity averse for large-probability gains and small-probability losses. We trace these effects back to stake effects on decisions under risk (known probabilities) and uncertainty (unknown probabilities). For risk, we replicate previous findings. For uncertainty, we find an increase in probabilistic insensitivity under high stakes that is driven by increased uncertainty aversion for large-probability gains and for small-probability losses.... view less
Classification
Basic Research, General Concepts and History of Economics
Free Keywords
Ambiguity aversion; Monetary stakes; Risk attitudes
Document language
English
Publication Year
2017
Page/Pages
p. 19-35
Journal
Theory and Decision, 83 (2017) 1
ISSN
1573-7187
Status
Published Version; peer reviewed