Recursive Ambiguity and Machina's Examples

David Dillenberger, Uzi Segal
2012 Social Science Research Network  
Machina (2009 Machina ( , 2012 lists a number of situations where standard models of ambiguity aversion are unable to capture plausible features of ambiguity attitudes. Most of these problems arise in choice over prospects involving three or more outcomes. We show that the recursive non-expected utility model of Segal (1987) is rich enough to accommodate all these situations. JEL Classification number: D81
doi:10.2139/ssrn.2063939 fatcat:ntn3ark4hjfyre42zakl25meme