Ambiguity—The Unknown Unknowns
Lecture no. 8 from the course: Behavioral Economics: When Psychology and Economics Collide
Taught by Professor Scott Huettel | 27 min | Categories: The Great Courses Plus Online Economics & Finance Courses
In behavioral economics, “ambiguity” refers to conditions in decision making in which we do not know and cannot estimate the probabilities of potential outcomes. Here, investigate three circumstances in decision making that produce ambiguity: “hidden information,” “asymmetrical knowledge,” and “unfamiliar contexts.” Then, learn a two-step approach for dealing effectively with ambiguity.