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D81

Criteria for Decision-Making under Risk and Uncertainty

Publication

Risk Preferences and the Poverty Trap: A Look at Technology Uptake amongst Smallholder Farmers in the Matzikama Municipality

Hafsah Jumare, Martine Visser and Kerri Brick
A number of studies suggest the risk preference of low income individuals can result in behaviour that create conditions of sub optimal investment and thus persistent poverty. In this paper, we carry out a study with small-scale farmers in the Matzikama Municipality of the Western Cape, South...
Jan 2018
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Publication

Bayesian learning with multiple priors and non-vanishing ambiguity

Alexander Zimper and Wei Ma
The existing models of Bayesian learning with multiple priors by Marinacci (2002) and by Epstein and Schneider (2007) formalize the intuitive notion that ambiguity should vanish through statistical learning in an one-urn environment. Moreover, the multiple priors decision maker of these models will...
Jun 2015
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Publication

Who's Afraid of the Big Bad Wolf? Risk Aversion and Gender Discrimination in Assessment

Jason Hartford and Nic Spearman
This study exploits a natural experiment to evaluate the gender bias effect associated with negative marking due to gender-differentiated risk aversion. This approach avoids framing effects that characterize experimental evaluation of negative marking assessments. Evidence of a gender bias against...
Feb 2014
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Publication

The impact of statistical learning on violations of the sure-thing principle

Nicky Nicholls, Aylit Romm and Alexander Zimper
This paper experimentally tests whether violations of Savage's (1954) subjective expected utility theory decrease if the ambiguity of an uncertain decision situation is reduced through statistical learning. Because our data does not show such a decrease, existing models which formalize ambiguity...
Oct 2013
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Publication

A decision-theoretic model of asset-price underreaction and overreaction to dividend news

Alexander Ludwig and Alexander Zimper
We combine new developments in decision theory with a standard consumption-based asset-pricing framework. In our model the efficient market hypothesis is violated if and only if agents’ beliefs' express ambiguity about the stochastic process driving economic fundamentals. Asset price fluctuations...
Jun 2012
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Publication

Risk Aversion: Experimental Evidence from South African Fishing Communities

Kerri Brick, Martine Visser and Justine Burns
We estimate the risk attitudes of a large sample of small-scale fishers from various fishing communities along the west coast of South Africa, using subjects’ choices over lotteries with real monetary prizes. We find that participants are moderately risk averse and that risk attitudes vary with...
Jul 2011
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Publication

Indecisiveness aversion and preference for commitment

Eric Danan, Ani Guerdjikova and Alexander Zimper
We present an axiomatic model of preferences over menus that is motivated by three assumptions. First, the decision maker is uncertain ex ante (i.e. at the time of choosing a menu) about her ex post (i.e. at the time of choosing an option within her chosen menu) preferences over options, and she...
Nov 2008
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Publication

Revisiting independence and stochastic dominance for compound lotteries

Alexander Zimper
We establish mathematical equivalence between independence of irrelevant alternatives and monotonicity with respect to first order stochastic dominance. This formal equivalence result between the two principles is obtained under two key conditions. Firstly, for all , each principle is defined on...
Oct 2008
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Publication

Returns to Schooling: Skills Accumulation or Information Revelation?

Steve Koch & S Ntege
This paper explores the degree to which imperfect information in the labour market regarding worker quality is likely to impact employment opportunities, as well as the wages associated with those opportunities. The primary purpose of this paper is to provide preliminary empirical evidence that...
Jun 2008
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