Abstract
The definition of the Ellsberg phenomenon, which takes into consideration only two choices, is introduced according to the CEU (Choquet Expected Utility) theory. A necessary and sufficient condition for its existence is demonstrated when the utility function is linear. An analogous condition is demonstrated when the utility function is not necessarily linear, provided that actions have only two possible consequences. If there are more than two consequences, the Ellsberg phenomenon results to be impossible. This impossibility crucially depends on the condition that only two choices are taken into consideration.
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References
Ellsberg D. (1961) Risk, Ambiguity, and the Savage Axioms, Quarterly Journal of Economics, 75, 643–669.
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© 1994 Springer Science+Business Media New York
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Montesano, A. (1994). On Some Conditions for the Ellsberg Phenomenon. In: RÃos, S. (eds) Decision Theory and Decision Analysis: Trends and Challenges. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-1372-4_6
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DOI: https://doi.org/10.1007/978-94-011-1372-4_6
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-010-4600-8
Online ISBN: 978-94-011-1372-4
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