The Effect of Communicating Ambiguous Risk Information on Choice

• Main Author: Tigran A. Melkonyan
• Format: Article
• Language: English
• Published: Western Agricultural Economics Association 2011-08-01
• Series: Journal of Agricultural and Resource Economics
• Subjects: alpha-maximin expected utility; aggregation of expert opinions; ambiguity; knightian uncertainty; risk communication; trust in information source
• Online Access: https://ageconsearch.umn.edu/record/117170
• ISSN: 1068-5502; 2327-8285

Decision makers are frequently confronted with ambiguous risk information about activities with potential hazards. This may be a result of conflicting risk estimates from multiple sources or ambiguous risk information from a single source. The paper considers processing ambiguous risk information and its effect on the behavior of a decision maker with a-maximin expected utility preferences. The effect of imprecise risk information on behavior is related to the content of information, the decision maker's trust in different sources of information, and his or her aversion to ambiguity.