Ambiguity aversion and familiarity bias: Evidence from behavioral and gene association studies

Ambiguity aversion and familiarity bias: Evidence from behavioral and gene association studies It is increasingly recognized that decision making under uncertainty depends not only on probabilities, but also on psychological factors such as ambiguity and familiarity. Using 325 Beijing subjects, we conduct a neurogenetic study of ambiguity aversion and familiarity bias in an incentivized laboratory setting. For ambiguity aversion, 49.4% of the subjects choose to bet on the 50–50 deck despite the unknown deck paying 20% more. For familiarity bias, 39.6% choose the bet on Beijing’s temperature rather than the corresponding bet with Tokyo even though the latter pays 20% more. We genotype subjects for anxiety-related candidate genes and find a serotonin transporter polymorphism being associated with familiarity bias, but not ambiguity aversion, while the dopamine D5 receptor gene and estrogen receptor beta gene are associated with ambiguity aversion only among female subjects. Our findings contribute to understanding of decision making under uncertainty beyond revealed preference. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Risk and Uncertainty Springer Journals

Ambiguity aversion and familiarity bias: Evidence from behavioral and gene association studies

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Publisher
Springer Journals
Copyright
Copyright © 2011 by Springer Science+Business Media, LLC
Subject
Economics; Economic Theory/Quantitative Economics/Mathematical Methods; Microeconomics; Operation Research/Decision Theory; Environmental Economics
ISSN
0895-5646
eISSN
1573-0476
DOI
10.1007/s11166-011-9134-0
Publisher site
See Article on Publisher Site

Abstract

It is increasingly recognized that decision making under uncertainty depends not only on probabilities, but also on psychological factors such as ambiguity and familiarity. Using 325 Beijing subjects, we conduct a neurogenetic study of ambiguity aversion and familiarity bias in an incentivized laboratory setting. For ambiguity aversion, 49.4% of the subjects choose to bet on the 50–50 deck despite the unknown deck paying 20% more. For familiarity bias, 39.6% choose the bet on Beijing’s temperature rather than the corresponding bet with Tokyo even though the latter pays 20% more. We genotype subjects for anxiety-related candidate genes and find a serotonin transporter polymorphism being associated with familiarity bias, but not ambiguity aversion, while the dopamine D5 receptor gene and estrogen receptor beta gene are associated with ambiguity aversion only among female subjects. Our findings contribute to understanding of decision making under uncertainty beyond revealed preference.

Journal

Journal of Risk and UncertaintySpringer Journals

Published: Dec 7, 2011

References

  • The rich domain of uncertainty: Source functions and their experimental implementation
    Abdellaoui, M; Baillon, A; Placido, L; Wakker, PP

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