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Aggregating imprecise or conflicting beliefs: An experimental investigation using modern ambiguity theories
Journal article   Peer reviewed

Aggregating imprecise or conflicting beliefs: An experimental investigation using modern ambiguity theories

Aurelien Baillon, Laure Cabantous and Peter P. Wakker
Journal of Risk and Uncertainty, Vol.44(2), pp.115-147
01/04/2012

Abstract

Ambiguity Conflicting sources of information Source of uncertainty Beliefs Belief aggregation Prospect theory Economics
Two experiments show that violations of expected utility due to ambiguity, found in general decision experiments, also affect belief aggregation. Hence we use modern ambiguity theories to analyze belief aggregation, thus obtaining more refined and empirically more valid results than traditional theories can provide. We can now confirm more reliably that conflicting (heterogeneous) beliefs where some agents express certainty are processed differently than informationally equivalent imprecise homogeneous beliefs. We can also investigate new phenomena related to ambiguity. For instance, agents who express certainty receive extra weight (a cognitive effect related to ambiguity-generated insensitivity) and generate extra preference value (source preference; a motivational effect related to ambiguity aversion). Hence, incentive compatible belief elicitations that prevent manipulation are especially warranted when agents express certainty. For multiple prior theories of ambiguity, our findings imply that the same prior probabilities can be treated differently in different contexts, suggesting an interest of corresponding generalizations.

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Collaboration types
Domestic collaboration
International collaboration
Citation topics
6 Social Sciences
6.122 Economic Theory
6.122.1287 Risk and Uncertainty
Web of Science research areas
Business, Finance
Economics
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