We study the properties associated to various de…nitions of ambiguity ([8], [9], [18] and [23]) in the context of Maximin Expected Utility (MEU). We show that each de…nition of unambiguous events produces certain restrictions on the set of priors, and completely characterize each de…nition in terms of the properties it imposes on the MEU functional. We apply our results to two open problems. First, in the context of MEU, we show the existence of a fundamental incompatibility between the axiom of "Small unambiguous event continuity" ([8]) and the notions of unambiguous event due to Zhang [23] and Epstein-Zhang [8]. Second, we show that, in the context of MEU, the classes of unambiguous events according to either Zhang [23] or Epstein-Zhang [8] are always-systems. Finally, we reconsider the various de…nitions in light of our …ndings, and identify some new objects (Z-…lters and EZ-…lters) corresponding to properties which, while neglected in the current literature, seem relevant to us.
Asymmetric awareness of the contracting parties regarding the uncertainty surrounding them is proposed as a reason for incompleteness in contractual forms. An insurance problem is studied between a risk neutral insurer, who has superior awareness regarding the nature of the uncertainty, and a risk averse insuree, who cannot foresee all the relevant contingencies. The insurer can mention in a contract some contingencies that the insuree was originally unaware of. It is shown that there are equilibria where the insurer strategically o ers incomplete contracts. Competition among insurers who are symmetrically aware of the uncertainty promotes awareness of the insuree. [JEL Classi cation: D83, D86]Keywords: Asymmetric Awareness, Insurance I am grateful to Massimiliano Amarante, Pierre-Andr e Chiappori, and Bernard Salani e for their valuable advice. I would like to thank Patrick Bolton, Yeon-Koo Che, Prajit Dutta, Aviad Heifetz, Erkut Ozbay, John Quiggin, Burkhard Schipper, Paolo Siconol and an anonymous referee for their helpful comments and suggestions.
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