Analysing Ellsberg’s Paradox by Means of Interval-Probability
Kurt Weichselberger, Thomas Augustin · 1998
The results reported by Ellsberg (1961) are often considered paradoxical. Indeed they reveal behaviour contrasting the sure-thing principle. An analysis employing modern tools produces two insights: 1) The experimental setting of Ellsberg can be adequately described only by means of interval-probability. 2) The validity of the sure-thing principle is restricted to those situations which can sufficiently be described by classical probability. — In addition Ellsberg’s results indicate a typology of behaviour when knowledge is given by interval-probability.