New definition of ambiguity aversion in decision-making revolutionizes risk assessment.
The article explores how people make decisions when faced with uncertainty and ambiguity. The researchers introduce a new way to measure ambiguity aversion, similar to how we measure risk aversion. They show that preferences can be categorized as more or less averse to ambiguity, depending on how they compare to standard decision-making models. By applying this concept to a classic problem involving colored urns, they demonstrate that their approach provides clear and intuitive answers.