Abstract
We present a definition of increasing uncertainty, in which an elementary increase in the uncertainty of any act corresponds to the addition of an 'elementary bet' that increases consumption by a fixed amount in (relatively) 'good' states and decreases consumption by a fixed (and possibly different) amount in (relatively) 'bad' states. This definition naturally gives rise to a dual definition of comparative aversion to uncertainty. We characterize this definition for a popular class of generalized models of choice under uncertainty.
Original language | English |
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Pages (from-to) | 117-141 |
Number of pages | 25 |
Journal | Mathematical Social Sciences |
Volume | 49 |
Issue number | 2 |
DOIs | |
Publication status | Published - Mar 2005 |