Comparative ambiguity aversion and downside ambiguity aversion

Yi Chieh Huang, Larry Y. Tzeng, Lin Zhao

Research output: Contribution to journalArticlepeer-review

6 Scopus citations


This paper first defines an increase in ambiguity and an increase in downside ambiguity. We then provide comparative criteria for ambiguity aversion and downside ambiguity aversion. Different from the finding that the comparative criterion for risk aversion is variant with the measure of the premium to reduce risks, we show that the criteria remain the same, whether the premiums to reduce ambiguity and downside ambiguity are measured by utility or money. Under the criteria, a more ambiguity-averse (downside-ambiguity-averse) individual is shown to spend more effort in reducing ambiguity (downside ambiguity) than a less ambiguity-averse (downside-ambiguity-averse) individual.

Original languageEnglish
Pages (from-to)257-269
Number of pages13
JournalInsurance: Mathematics and Economics
StatePublished - 1 May 2015


  • Ambiguity
  • Comparative ambiguity aversion
  • Comparative downside ambiguity aversion
  • Downside ambiguity
  • Effort


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