Abstract
The present research examines how uncertainty in probability information may shape decision making when facing risk with an fMRI experiment. In a probability evaluation task where the probability differences between binary choices is insignificant, we find participants usually avert the options with ambiguous probability information and violate the axiom of reduction of compound lotteries (ROCL). Although the two effects are not related, the exhibited tendency of ambiguity aversion is closely linked to the participant's preference towards the constant reward when choosing between that and a lottery. In addition to identifying the distinct neural networks underlying ambiguity aversion and the violation of ROCL, the brain imaging analyses from both the probability evaluation and lottery choice task find decreased brain activity in the superior parietal lobule for participants with a stronger tendency for ambiguity aversion and suggest a possible common source for the similar aversive behavior.
| Translated title of the contribution | Decision Making with Uncertain Probability Information |
|---|---|
| Original language | Chinese (Traditional) |
| Pages (from-to) | 207-250 |
| Number of pages | 44 |
| Journal | Taiwan Economic Review |
| Volume | 15 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 2023 |
All Science Journal Classification (ASJC) codes
- Economics, Econometrics and Finance(all)