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:
“The hill farmer ... always seems to make out somehow with his corn patch, his few vegetables, his rifle, and fishing rod. This self-contained economy creates in the hillman a comparative disinterest in the world’s affairs, along with a disdain of lowland ways. “I don’t go to question the good Lord in his wisdom,” runs the phrasing attributed to a typical mountaineer, “but I jest cain’t see why He put valleys in between the hills.””
—Administration in the State of Arka, U.S. public relief program (1935-1943)
“Knowledge has two extremes. The first is the pure natural ignorance in which all men find themselves at birth. The other extreme is that reached by great minds, who, having run through all that men can know, find they know nothing, and come back again to that same natural ignorance from which they set out; this is a learned ignorance which is conscious of itself.”
—Blaise Pascal (1623–1662)