Ellsberg paradox

نوشته شده در موضوع خرید اینترنتی در ۳۰ آبان ۱۳۹۵

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The Ellsberg paradox is a antithesis in welfare speculation in that people’s choices violate a postulates of biased approaching utility.[1] It is generally taken to be justification for ambiguity aversion. The antithesis was popularized by Daniel Ellsberg, nonetheless a chronicle of it was remarkable extremely progressing by John Maynard Keynes.[2]

The simple suspicion is that people overwhelmingly cite holding on risk in situations where they know specific contingency rather than an choice risk unfolding in that a contingency are totally ambiguous—they will always select a famous luck of winning over an opposite luck of winning even if a famous luck is low and a opposite luck could be a pledge of winning. That is, given a choice of risks to take (such as bets), people “prefer a demon they know” rather than presumption a risk where contingency are formidable or unfit to calculate.[3]

Ellsberg indeed due dual apart suspicion experiments, a due choices that protest biased approaching utility. The 2-color problem involves bets on dual urns, both of that enclose balls of dual opposite colors. The 3-color problem, described below, involves bets on a singular urn, that contains balls of 3 opposite colors.

The one-urn paradox[edit]

Suppose we have an vessel containing 30 red balls and 60 other balls that are possibly black or yellow. You don’t know how many black or how many yellow balls there are, yet that a sum series of black balls and a sum series of yellow equals 60. The balls are good churned so that any particular round is as approaching to be drawn as any other. You are now given a choice between dual gambles:

Also we are given a choice between these dual gambles (about a opposite pull from a same urn):

This conditions poses both Knightian uncertainty – how many of a non-red balls are yellow and how many are black, that is not quantified – and probability – either a round is red or non-red, that is 1/3 vs. 2/3.

Utility speculation interpretation[edit]

Utility speculation models a choice by presumption that in selecting between these gambles, people assume a probability that a non-red balls are yellow contra black, and afterwards discriminate a expected utility of a dual gambles.

Since a prizes are accurately a same, it follows that we will prefer Gamble A to Gamble B if and usually if we trust that sketch a red round is some-more approaching than sketch a black round (according to approaching application theory). Also, there would be no transparent welfare between a choices if we suspicion that a red round was as approaching as a black ball. Similarly it follows that we will prefer Gamble C to Gamble D if, and usually if, we trust that sketch a red or yellow round is some-more approaching than sketch a black or yellow ball. It cunning seem discerning that, if sketch a red round is some-more approaching than sketch a black ball, afterwards sketch a red or yellow round is also some-more approaching than sketch a black or yellow ball. So, assuming we prefer Gamble A to Gamble B, it follows that we will also prefer Gamble C to Gamble D. And, assuming instead that we prefer Gamble B to Gamble A, it follows that we will also prefer Gamble D to Gamble C.

When surveyed, however, many people strictly prefer Gamble A to Gamble B and Gamble D to Gamble C. Therefore, some assumptions of a approaching application speculation are violated.

Numerical demonstration[edit]

Mathematically, your estimated probabilities of any tone round can be represented as: R, Y, and B. If we strictly prefer Gamble A to Gamble B, by application theory, it is reputed this welfare is reflected by a approaching utilities of a dual gambles: specifically, it contingency be a box that

R⋅U($100)+(1−R)⋅U($0)B⋅U($100)+(1−B)⋅U($0){displaystyle Rcdot U($100)+(1-R)cdot U($0)Bcdot U($100)+(1-B)cdot U($0)}

where U( ) is your application function. If U($100)  U($0) (you particularly cite $100 to nothing), this simplifies to:

R[U($100)−U($0)]B[U($100)−U($0)]⟺RB{displaystyle R[U($100)-U($0)]B[U($100)-U($0)]Longleftrightarrow RB;}

If we also particularly cite Gamble D to Gamble C, a following inequality is further obtained:

B⋅U($100)+Y⋅U($100)+R⋅U($0)R⋅U($100)+Y⋅U($100)+B⋅U($0){displaystyle Bcdot U($100)+Ycdot U($100)+Rcdot U($0)Rcdot U($100)+Ycdot U($100)+Bcdot U($0)}

This simplifies to:

B[U($100)−U($0)]R[U($100)−U($0)]⟺BR{displaystyle B[U($100)-U($0)]R[U($100)-U($0)]Longleftrightarrow BR;}

This counterbalance indicates that your preferences are unsuitable with expected-utility theory.

Generality of a paradox[edit]

Note that a outcome binds regardless of your application function. Indeed, a volume of a boon is further irrelevant. Whichever play we choose, a esteem for winning it is a same, and a cost of losing it is a same (no cost), so ultimately, there are usually dual outcomes: we accept a specific volume of money, or we accept nothing. Therefore, it is sufficient to assume that we cite receiving some income to receiving zero (and in fact, this arrogance is not necessary—in a mathematical diagnosis above, it was insincere U($100)  U($0), yet a counterbalance can still be performed for U($100)  U($0) and for U($100) = U($0)).

In addition, a outcome binds regardless of your risk aversion. All a gambles engage risk. By selecting Gamble D, we have a 1 in 3 possibility of receiving nothing, and by selecting Gamble A, we have a 2 in 3 possibility of receiving nothing. If Gamble A was reduction unsure than Gamble B, it would follow[citation needed] that Gamble C was reduction unsure than Gamble D (and clamp versa), so, risk is not averted in this way.

However, since a accurate chances of winning are famous for Gambles A and D, and not famous for Gambles B and C, this can be taken as justification for some arrange of ambiguity hatred that can't be accounted for in approaching application theory. It has been demonstrated that this materialisation occurs usually when a choice set permits comparison of a obscure tender with a reduction deceptive tender (but not when obscure propositions are evaluated in isolation).[4]

Possible explanations[edit]

There have been several attempts to yield decision-theoretic explanations of Ellsberg’s observation. Since a probabilistic information accessible to a decision-maker is incomplete, these attempts infrequently concentration on quantifying a non-probabilistic ambiguity that a decision-maker faces – see Knightian uncertainty. That is, these choice approaches infrequently suspect that a representative formulates a biased (though not indispensably Bayesian) luck for probable outcomes.

One such try is formed on info-gap welfare theory. The representative is told accurate probabilities of some outcomes, yet a unsentimental definition of a luck numbers is not wholly clear. For instance, in a gambles discussed above, a luck of a red round is 30/90, that is a accurate number. Nonetheless, a representative cunning not distinguish, intuitively, between this and, say, 30/91. No luck information whatsoever is supposing per other outcomes, so a representative has really misleading biased impressions of these probabilities.

In light of a ambiguity in a probabilities of a outcomes, a representative is incompetent to weigh a accurate approaching utility. Consequently, a choice formed on maximizing a approaching application is also impossible. The info-gap proceed supposes that a representative practically formulates info-gap models for a subjectively capricious probabilities. The representative afterwards tries to satisfice a approaching application and to maximize a robustness opposite doubt in a close probabilities. This robust-satisficing proceed can be grown categorically to uncover that a choices of decision-makers should arrangement precisely a welfare annulment that Ellsberg observed.[5]

Another probable reason is that this form of diversion triggers a deception hatred mechanism. Many humans naturally assume in real-world situations that if they are not told a luck of a certain event, it is to mistreat them. People make a same decisions in a examination that they would about associated yet not matching real-life problems where a experimenter would be approaching to be a deceiver behaving opposite a subject’s interests. When faced with a choice between a red round and a black ball, a luck of 30/90 is compared to a lower part of a 0/90۶۰/۹۰ operation (the luck of removing a black ball). The normal chairman expects there to be fewer black balls than yellow balls since in many real-world situations, it would be to a advantage of a experimenter to put fewer black balls in a vessel when charity such a gamble. On a other hand, when offering a choice between red and yellow balls and black and yellow balls, people assume that there contingency be fewer than 30 yellow balls as would be required to mistreat them. When creation a decision, it is utterly probable that people simply forget to cruise that a experimenter does not have a possibility to cgange a essence of a vessel in between a draws. In real-life situations, even if a vessel is not to be modified, people would be fearful of being cheated on that front as well.[6]

A alteration of application speculation to incorporate doubt as graphic from risk is Choquet approaching utility, that also proposes a resolution to a paradox.

Alternative explanations[edit]

Other choice explanations embody a cunning hypothesis[7] and analogous stupidity hypothesis.[4] These theories charge a source of a ambiguity hatred to a participant’s pre-existing knowledge.

See also[edit]

  • Allais paradox
  • Ambiguity aversion
  • Experimental economics
  • Subjective approaching utility
  • Utility theory

References[edit]

  1. ^ Ellsberg, Daniel (1961). “Risk, Ambiguity, and a Savage Axioms”. Quarterly Journal of Economics. 75 (4): 643–۶۶۹٫ doi:10.2307/1884324. JSTOR ۱۸۸۴۳۲۴٫ 
  2. ^ Keynes 1921, pp. ۷۵–۷۶, divide 315, footnote 2.
  3. ^ EconPort contention of a paradox
  4. ^ a b Fox, Craig R.; Tversky, Amos (1995). “Ambiguity Aversion and Comparative Ignorance”. Quarterly Journal of Economics. 110 (3): 585–۶۰۳٫ doi:10.2307/2946693. JSTOR ۲۹۴۶۶۹۳٫ 
  5. ^ Ben-Haim, Yakov (2006). Info-gap Decision Theory: Decisions Under Severe Uncertainty (2nd ed.). Academic Press. territory 11.1. ISBN ۰-۱۲-۳۷۳۵۵۲-۱٫ 
  6. ^ Lima Filho, Roberto IRL (July 2, 2009). “Rationality Intertwined: Classical vs Institutional View”. pp. ۵–۶٫ doi:10.2139/ssrn.2389751. SSRN ۲۳۸۹۷۵۱.  Missing or dull |url= (help)
  7. ^ Heath, Chip; Tversky, Amos (1991). “Preference and Belief: Ambiguity and Competence in Choice underneath Uncertainty”. Journal of Risk and Uncertainty. 4: 5–۲۸٫ doi:10.1007/bf00057884. 

Further reading[edit]

Article source: https://en.wikipedia.org/wiki/Ellsberg_paradox

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