Study reveals why people avoid uncertain decisions, impacting everyday choices.
Subjects often struggle to assess the likelihood of uncertain events, which are called 'ambiguous'. They tend to avoid options that depend on these ambiguous events, showing 'ambiguity aversion'. Decision theorists have developed models like Choquet-expected utility and maxmin expected utility to explain and accommodate ambiguity and ambiguity aversion since the mid-1980s. Recent advancements in this theory have also been summarized.