Wednesday 4 February 2015, 1.00PM to 2:00pm
Speaker(s): Graham Loomes, Warwick Business School
To date, most experimental investigations of ambiguity have focused upon individual decision making in non-strategic environments. However, much uncertainty in life relates to the behaviour of others in interactive environments. This paper considers the implications of subjective expected utility theory (Savage, 1954) in a co-ordination game environment where ambiguity arises from uncertainty about the actions of other players. In this environment, a large majority of individuals violate subjective expected utility theory. We discuss three possible explanations of the observed behaviour: nonlinear transformation of probabilities; noise in responses; and/or systematic biases in the way that individuals generate subjective probabilities.
Location: ARRC Auditorium (A/RC014)
Admission: All welcome.