Generating Ambiguity in the Laboratory

Management Science, Volume 57, Number 4 (April 2011), pp. 705-712

Posted: 27 Sep 2007 Last revised: 27 Jan 2013

See all articles by Jack Douglas Stecher

Jack Douglas Stecher

University of Alberta - Department of Accounting, Operations & Information Systems

Timothy W. Shields

Chapman University - George L. Argyros School of Business & Economics; Chapman University - Economic Science Institute

John W. Dickhaut

Chapman University (Deceased)

Date Written: September 1, 2007

Abstract

This article develops a method for drawing samples from a distribution with no finite quantiles or moments. The method provides researchers with a way to give subjects the experience of ambiguity. In any experiment, learning the distribution from experience is impossible for the subjects, essentially because it is impossible for the experimenter. We characterize our method, illustrate it in simulations, and then test it in a laboratory experiment. Our method does not withhold sampling information, does not assume that the subject is incapable of making statistical inferences, is replicable across experiments, and requires no special apparatus. We compare our method to the techniques used in related experiments that attempt to produce an ambiguous experience for the subjects.

Keywords: ambiguity, Ellsberg, Knightian uncertainty, laboratory experiments, decision analysis, theory

JEL Classification: C90, C91, C92, D80, D81

Suggested Citation

Stecher, Jack Douglas and Shields, Timothy W. and Dickhaut, John, Generating Ambiguity in the Laboratory (September 1, 2007). Management Science, Volume 57, Number 4 (April 2011), pp. 705-712. Available at SSRN: https://ssrn.com/abstract=1017075

Jack Douglas Stecher (Contact Author)

University of Alberta - Department of Accounting, Operations & Information Systems ( email )

Edmonton, Alberta T6G 2R6
Canada

Timothy W. Shields

Chapman University - George L. Argyros School of Business & Economics ( email )

One University Drive
Orange, CA 92866
United States
714.289.2092 (Phone)

HOME PAGE: http://sites.google.com/site/timothywshields/

Chapman University - Economic Science Institute ( email )

One University Dr.
Orange, CA 92866
United States

John Dickhaut

Chapman University (Deceased)

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