Comparative Ignorance
Tversky and Fox (1995) addressed ambiguity aversion, the idea that people do not like ambiguous gambles or choices with ambiguity, with the comparative ignorance framework. Their idea was that people are only ambiguity averse when their attention is specifically brought to the ambiguity by comparing an ambiguous option to an unambiguous option. For instance, people are willing to bet more on choosing a correct colored ball from an urn containing equal proportions of black and red balls than an urn with unknown proportions of balls when evaluating both of these urns at the same time. However, when evaluating them separately, people are willing to bet approximately the same amount on either urn. Thus, when it is possible to compare the ambiguous gamble to an unambiguous gamble people are averse — but not when one is ignorant of this comparison.
Read more about this topic: Amos Tversky
Famous quotes containing the words comparative and/or ignorance:
“If you believe that a nation is really better off which achieves for a comparative few, those who are capable of attaining it, high culture, ease, opportunity, and that these few from their enlightenment should give what they consider best to those less favored, then you naturally belong to the Republican Party. But if you believe that people must struggle slowly to the light for themselves, then it seems to me that you are a Democrat.”
—Eleanor Roosevelt (1884–1962)
“The magic of first love is our ignorance that it can ever end.”
—Benjamin Disraeli (1804–1881)