Sharing Beliefs: Between Agreeing and Disagreeing

Billot, Antoine; Chateauneuf, Alain; Gilboa, Itzhak; Tallon, Jean-Marc

doi:10.1111/1468-0262.00127

Cited by 108 publications

(125 citation statements)

References 8 publications

(4 reference statements)

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“…See for instance Dow and Werlang (1992), Epstein and Wang (1994), Tallon (1998), Billot, Chateauneuf, Gilboa, and Tallon (2000), Chateauneuf, Dana, and Tallon (2000), Mukerji and Tallon (2001), Dana (2002), Abouda and Chateauneuf (2002), Dana (2004), Rigotti and Shannon (2005), Asano (2006), Rigotti and Shannon (2007), Rigotti, Shannon, and Strzalecki (2008) and Strzalecki and Werner (2011). 4,5 We discuss in more detail three of these papers which seem closer related to our results.…”

Section: Related Literaturesupporting

confidence: 73%

“…For the insurance case, we obtain a version of the main results of Billot, Chateauneuf, Gilboa, and Tallon (2000) and Rigotti, Shannon, and Strzalecki (2008) for situations where the aggregate endowment is not constant. Our result shows the equivalence of a common conditional prior and that Pareto optimal allocations are unambiguous.…”

Section: Introductionmentioning

confidence: 70%

“…Notice that this result is related to one implication of Theorem 1 of Billot, Chateauneuf, Gilboa, and Tallon (2000), which shows, under the MEU setting, that the existence of a common prior (∩ i∈N P i = ∅) implies that any full insurance allocation is Pareto optimal. For this, they assumed that the aggregate endowment is constant.…”

Section: Betting and Ambiguity Aversionmentioning

confidence: 83%

“…Chateauneuf, Dana, and Tallon (2000) go a step further, by considering an economy where there are multiple CEU-DMs agents. Also, Billot, Chateauneuf, Gilboa, and Tallon (2000) consider an economy with MEU-DMs.…”

Section: Betting and Ambiguity Aversionmentioning

confidence: 99%

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Ambiguity aversion and trade

Castro

Chateauneuf

2011

Econ Theory

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may forthcoming, Economic Theory AbstractWhat is the effect of ambiguity aversion on trade? Although in a Bewley's model ambiguity aversion always lead to less trade, in other models this is not always true. However, we show that if the endowments are unambiguous then more ambiguity aversion implies less trade, for a very general class of preferences. The reduction in trade caused by ambiguity aversion can be as severe as to lead to no-trade. In an economy with MEU decision makers, we show that if the aggregate endowment is unanimously unambiguous then every Pareto optima allocation is also unambiguous. We also characterize the situation in which every unanimously unambiguous allocation is Pareto optimal. Finally, we show how our results can be used to explain the home-bias effect. As a useful result for our methods, we also obtain an additivity theorem for CEU and MEU decision makers that does not require comonotonicity.JEL Code: D51, D6, D8.

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Section: Related Literaturesupporting

confidence: 73%

Section: Introductionmentioning

confidence: 70%

Section: Betting and Ambiguity Aversionmentioning

confidence: 83%

Section: Betting and Ambiguity Aversionmentioning

confidence: 99%

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Ambiguity aversion and trade

Castro

Chateauneuf

2011

Econ Theory

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“…It can also explain why at times of greater volatility one may …nd lower volumes of trade: with a larger set of probabilities that are considered possible, there will be more DMs who prefer neither to buy nor to sell. 76 The question of trade among uncertainty averse agents has been also studied in Billot, Chateauneuf, Gilboa and Tallon (2000), Kajii and Ui (2006), and Rigotti, Shannon, and Strzalecki (2008. Epstein and Miao (2003) use uncertainty aversion to explain the home bias phenomenon in international …nance, namely, the observation that people prefer to trade stocks of their own country rather than foreign ones.…”

Section: Applicationsmentioning

confidence: 99%

Ambiguity and the Bayesian Paradigm

Gilboa

Marinacci

2016

Readings in Formal Epistemology

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This is a survey of some of the recent decision-theoretic literature involving beliefs that cannot be quanti…ed by a Bayesian prior. We discuss historical, philosophical, and axiomatic foundations of the Bayesian model, as well as of several alternative models recently proposed. The de…nition and comparison of ambiguity aversion and the updating of non-Bayesian beliefs are brie ‡y discussed. Finally, several applications are mentioned to illustrate the way that ambiguity (or "Knightian uncertainty") can change the way we think about economic problems.

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References

2012

Rumors in Financial Markets

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Sharing Beliefs: Between Agreeing and Disagreeing

Cited by 108 publications

References 8 publications

Ambiguity aversion and trade

Ambiguity aversion and trade

Ambiguity and the Bayesian Paradigm

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