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:
“That hour in the life of a man when first the help of humanity fails him, and he learns that in his obscurity and indigence humanity holds him a dog and no man: that hour is a hard one, but not the hardest. There is still another hour which follows, when he learns that in his infinite comparative minuteness and abjectness, the gods do likewise despise him, and own him not of their clan.”
—Herman Melville (1819–1891)
“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)