Choice with imprecise information: an experimental approach

Abstract

This article provides an experimental analysis of attitude toward imprecise and variable information. Imprecise information is provided in the form of a set of possible probability values, such that it is virtually impossible for the subjects to guess or estimate, which one in the set is true or more likely to be true. We investigate how geometric features of such information pieces affect choices. We find that the subjects care about more features than the pairs of best-case and worst-case, which is a counter-evidence to the well-known models, maximin and α-maximin. We find that presence of nonextreme points in the set affects choice, which suggests that attitude toward imprecision is ‘nonlinear.’ We also obtain an observation, though not significant, that information pieces have a complementarity that may not be explained by the Bayesian view.