Journal of Risk and Uncertainty

, Volume 44, Issue 1, pp 1–18 | Cite as

Ambiguity aversion and familiarity bias: Evidence from behavioral and gene association studies

  • Soo Hong Chew
  • Richard P. Ebstein
  • Songfa Zhong


It is increasingly recognized that decision making under uncertainty depends not only on probabilities, but also on psychological factors such as ambiguity and familiarity. Using 325 Beijing subjects, we conduct a neurogenetic study of ambiguity aversion and familiarity bias in an incentivized laboratory setting. For ambiguity aversion, 49.4% of the subjects choose to bet on the 50–50 deck despite the unknown deck paying 20% more. For familiarity bias, 39.6% choose the bet on Beijing’s temperature rather than the corresponding bet with Tokyo even though the latter pays 20% more. We genotype subjects for anxiety-related candidate genes and find a serotonin transporter polymorphism being associated with familiarity bias, but not ambiguity aversion, while the dopamine D5 receptor gene and estrogen receptor beta gene are associated with ambiguity aversion only among female subjects. Our findings contribute to understanding of decision making under uncertainty beyond revealed preference.


Ambiguity aversion Familiarity bias Source dependence Genetics Neuroeconomics 

JEL Classification

C91 D14 D81 D87 G11 



We thank Wang Rui, Wu Qingyu, and Ye Qiaofeng for assistance in conducting the behavioral experiments, and Idan Shalev for doing genotyping. Financial support from the Hong Kong University of Science and Technology, as well as National University of Singapore, is gratefully acknowledged.


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Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  • Soo Hong Chew
    • 1
    • 2
  • Richard P. Ebstein
    • 3
    • 4
  • Songfa Zhong
    • 5
  1. 1.Department of Economics and Department of FinanceNational University of SingaporeSingaporeSingapore
  2. 2.Center for Experimental Business Research and Department of EconomicsHong Kong University of Science and TechnologyHong KongHong Kong
  3. 3.Department of PsychologyNational University of SingaporeSingaporeSingapore
  4. 4.Scheinfeld Center of Human Genetics for Social SciencesHebrew UniversityJerusalemIsrael
  5. 5.Department of EconomicsNational University of SingaporeSingaporeSingapore

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