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Are Policymakers Ambiguity Averse ?

Abstract : We investigate the ambiguity preferences of a unique sample of real-life policymakers at the Paris UN climate conference (COP21). We find that policymakers are generally ambiguity averse. Using a simple design, we are moreover able to show that these preferences are not necessarily due to an irrational behavior, but rather to intrinsic preferences over unknown probabilities. Exploring the heterogeneity within our sample, we also show that the country of origin and the degree of quantitative sophistication affect policymakers’ attitudes towards compound risk, but not towards ambiguity. Robustness results are obtained in a lab experiment with a sample of university students.
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https://hal.archives-ouvertes.fr/hal-02504772
Contributor : Isabelle Celet <>
Submitted on : Wednesday, March 11, 2020 - 9:13:52 AM
Last modification on : Thursday, March 12, 2020 - 1:42:59 AM

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Loïc Berger, Valentina Bosetti. Are Policymakers Ambiguity Averse ?. Economic Journal, Wiley, 2019, 51, ⟨10.1093/ej/uez051⟩. ⟨hal-02504772⟩

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