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Ambiguity Revealed

25 Pages Posted: 26 Apr 2012 Last revised: 20 May 2013

See all articles by Ralph C. Bayer

Ralph C. Bayer

University of Adelaide

Subir Bose

University of Leicester - Department of Economics

Matthew Polisson

University of Leicester - Department of Economics

Ludovic Renou

Queen Mary University of London

Date Written: March 25, 2013

Abstract

We derive necessary and sufficient conditions for data sets composed of state-contingent prices and consumption to be consistent with two prominent models of decision making under ambiguity: variational preferences and smooth ambiguity. The revealed preference conditions for the maxmin expected utility and subjective expected utility models are characterized as special cases.

Keywords: ambiguity, revealed preference, maxmin, variational preferences, expected utility, smooth, uncertainty

JEL Classification: D1, D8

Suggested Citation: Suggested Citation

Bayer, Ralph C. and Bose, Subir and Polisson, Matthew and Renou, Ludovic, Ambiguity Revealed (March 25, 2013). Available at SSRN: https://ssrn.com/abstract=2046598 or http://dx.doi.org/10.2139/ssrn.2046598

Ralph C. Bayer

University of Adelaide ( email )

No 233 North Terrace, School of Commerce
Adelaide, South Australia 5005
Australia

Subir Bose

University of Leicester - Department of Economics ( email )

Department of Economics
Leicester LE1 7RH, Leicestershire LE1 7RH
United Kingdom

Matthew Polisson

University of Leicester - Department of Economics ( email )

University Road
Leicester, LE1 7RH
United Kingdom

Ludovic Renou (Contact Author)

Queen Mary University of London ( email )

Mile End Road
London, London E1 4NS
United Kingdom

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