Seminario di Dmitri Vinogradov

ore 12.30 Sala Seminari – I° piano, Palazzo Levi Cases, Via del Santo 33

14.03.2017

Signaling Probabilities in Ambiguity: on the role of vague news

Seminario di Dmitri Vinogradov, University of Essex

Facing the unknown, people often react to news that is either uninformative or based on limited evidence. Seemingly irrelevant news may either imply information about factors that underlie decisions, or affect people’s confidence. To decompose the impact of news into these two components, we confront the behavior of ambiguity-neutral and ambiguity-averse decision-makers in a two-color Ellsberg experiment with signals. Some signals bear no information about the ambiguous prospect, others allow one to judge on the likelihood of success, yet do not convey the exact probability of success. Even the seemingly irrelevant news affects subjects’ choices; ambiguity-averse participants are more likely to react to it. Uninformative signals influence decisions by having an impact primarily on the perceived ambiguity. Ambiguity-aversion matters less when people face informative signals. As ambiguity attitudes are rarely observed in real life we demonstrate that a distinction between the two types of effects can be made on the basis of observed variables such as specialized knowledge or gender of decision-makers.