Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those ...

When faced with a decision, most people like to know the odds and prefer to avoid ambiguity. It has been suggested that this aversion to ambiguity is linked to people’s assumption of worst possible ...

Buckholtz, Joshua W., Uma R. Karmarkar, Shengxuan Ye, Grace M. Brennan, and Arielle Baskin-Sommers. "Blunted Ambiguity Aversion During Cost-Benefit Decisions in ...

Decision-making under ambiguity addresses situations in which probabilities of future states are unknown or ill-defined, as distinct from risk where probabilities are well specified. In financial ...

Maximum-likelihood updating (MLU) is a well-known approach for extending static ambiguity sensitive preferences to dynamic set-ups. This paper develops an example in which MLU induces an ambiguity ...

Economic evaluation of climate policy traditionally treats uncertainty by appealing to expected utility theory. Yet our knowledge of the impacts of climate policy may not be of sufficient quality to ...

Guarantees in life are scarce. So when a global pandemic throws our environment into disarray, it is natural to shy away from ambiguity and lean into patterns that align with our worldview. Various ...