New study simplifies decision-making under uncertainty, changing how we choose.
The article simplifies the concept of ambiguity aversion in decision-making by comparing uncertainty preferences using probability equivalents. It introduces the idea of absolute ambiguity aversion, which is aversion to uncertainty relative to a neutral preference. These simplified definitions do not require decision makers to have the same utility function. The study shows that these definitions align with certain conditions for different decision-making models, such as subjective expected utility or maxmin expected utility.