The Ellsberg Paradox is an example of
A) violations of the conjunction law
B) ambiguity aversion
C) violation of base rates

Question

Quizplus · Accepted Answer

The Ellsberg Paradox is an example of ambiguity aversion, which is the tendency for people to avoid uncertain or ambiguous situations. In the paradox, participants are more likely to choose a sure bet with known probabilities over a risky bet where the probabilities are unknown or ambiguous, even when the expected value is the same for both options. This indicates that people have a preference for clear and certain information over uncertain information.

The Ellsberg Paradox Is an Example of