Ambiguity aversion and familiarity bias: Evidence from behavioral and gene association studies

Journal of Risk and Uncertainty

Volumn 44, Issue 1, 2012, Pages 1-18

  Chew, Soo Hong ^a,b   Ebstein, Richard P ^a,c   Zhong, Songfa ^a  

^a NATIONAL UNIVERSITY OF SINGAPORE   (Singapore)

^b HONG KONG UNIVERSITY OF SCIENCE AND TECHNOLOGY   (Hong Kong)

^c HEBREW UNIVERSITY OF JERUSALEM   (Israel)

Author keywords

Ambiguity aversion; Familiarity bias; Genetics; Neuroeconomics; Source dependence

Indexed keywords

EID: 84856744017     PISSN: 08955646     EISSN: 15730476     Source Type: Journal    
DOI: 10.1007/s11166-011-9134-0     Document Type: Article

References (60)

1. Abdellaoui, M., Baillon, A., Placido, L., & Wakker, P. P. (2011). The rich domain of uncertainty: Source functions and their experimental implementation. American Economic Review, 101(2), 695-723.
2. Benjamin, D. J., Chabris, C. F., Glaeser, E., Gudnason, V., Harris, T. B., Laibson, D., Lenore, J. L., & Purcell, S. (2007). Genoeconomics. In J. Milner, B. Elaine, C. Trujillo, M. Kaefer, & S. Ross (Eds.), Biosocial surveys. Washington: The National Academies.
3. Canli, T., & Lesch, K. P. (2007). Long story short: The serotonin transporter in emotion regulation and social cognition. Nature Neuroscience, 10(9), 1103-1109.
4. Carpenter, J., Garcia, J., & Lum, J. (2011). Dopamine receptor genes predict risk preferences, time preferences, and related economic choices. Journal of Risk and Uncertainty, 42(3), 233-261.
5. Cesarini, D., Dawes, C. T., Johannesson, M., Lichtenstein, P., & Wallace, B. (2009). Genetic variation in preferences for giving and risk taking. Quarterly Journal of Economics, 124(2), 809-842.
6. Chew, S. H. (1983). A generalization of the quasilinear mean with applications to the measurement of income inequality and decision theory resolving the Allais paradox. Econometrica, 51(4), 1065-1092.
7. Chew, S. H. (1989). Axiomatic utility theories with the betweenness property. Annals of Operations Research 19(1), 273-298.
8. Chew, S. H., & Sagi, J. S. (2006). Event exchangeability: Probabilistic sophistication without continuity or monotonicity. Econometrica, 74(3), 771-786.
9. Chew, S. H., & Sagi, J. S. (2008). Small worlds: Modeling attitudes toward sources of uncertainty. Journal of Economic Theory, 139(1), 1-24.
10. Chew, S. H., Li, K. K., Chark, R., & Zhong, S. (2008). Source preference and ambiguity aversion: Models and evidence from behavioral and neuroimaging experiments. In D. Houser, K. McCabe (Eds.), Neuroeconomics. Emerald.
11. Chew, S. H., Li, K. K., Chark, R., & Zhong, S. (2010). Familiarity bias: Evidence from laboratory and field experiments. Working paper.
12. Cloninger, C. R. (1986). A unified biosocial theory of personality and its role in the development of anxiety states. Psychiatric Developments, 4(3), 167-226.
13. Comings, D. E., Muhleman, D., Johnson, P., & MacMurray, J. P. (1999). Potential role of the estrogen receptor gene(ESR 1) in anxiety. Molecular Psychiatry, 4(4), 374-377.
14. Crisan, L. G., Pana, S., Vulturar, R., Heilman, R. M., Szekely, R., Druga, B., Dragos, N., & Miu, A. C. (2009). Genetic contributions of the serotonin transporter to social learning of fear and economic decision making. Social Cognitive and Affective Neuroscience, 4(4), 399-408.
15. Croson, R., & Gneezy, U. (2009). Gender differences in preferences. Journal of Economic Literature, 47(2), 1-27.
16. Dekel, E. (1986). An axiomatic characterization of preferences under uncertainty: Weakening the independence axiom. Journal of Economic Theory, 40(2), 304-318.
17. Ding, Y. C., Chi, H. C. et al. (2002). Evidence of positive selection acting at the human dopamine receptor D4 gene locus. Proceedings of the National Academy of Sciences of the United States of America 99(1), 309-314.
18. Dreber, A., Apicella, C. L., Eisenberg, D. T. A., Garcia, J. R., Zamore, R. S., Lum, J. K., & Campbell, B. (2009). The 7R polymorphism in the dopamine receptor D4 gene (DRD4) is associated with financial risk taking in men. Evolution and Human Behavior, 30(30), 85-92.
19. Dreber, A., Rand, D. G., Garcia, J. R., Wernerfelt, N., Lum, J. K., & Zeckhauser, R. (2011). Dopamine and risk preferences in different domains. Journal of Risk and Uncertainty, 43(1), 19-38.
20. Ellsberg, D. (1961). Risk, ambiguity, and the savage axioms. Quarterly Journal of Economics, 75(4), 643-669.
21. Ergin, H., & Gul, F. (2009). A subjective theory of compound lotteries. Journal of Economic Theory, 144, 899-929.
22. Fox, C. R., & Tversky, A. (1995). Ambiguity aversion and comparative ignorance. Quarterly Journal of Economics, 110(3), 585-603.
23. Frydman, C., Camerer, C., Bossaerts, P., & Rangel, A. (2011). MAOA-L carriers are better at making optimal financial decisions under risk. Proceedings of the Royal Society B: Biological Sciences, 278(1714), 2053-2059.
24. Geng, Y. G., Su, Q. R., Su, L. Y., Chen, Q., & Ren, G. Y. (2007). Comparison of the polymorphisms of androgen receptor gene and estrogen alpha and beta gene between adolescent females with first-onset major depressive disorder and control. International Journal of Neuroscience, 117(4), 539-547.
25. Gilboa, I., & Schmeidler, D. (1989). Maximin expected utility with a non-unique prior. Journal of Mathematical Economics, 18, 141-153.
26. Green, J. R., & Jullien, B. (1988). Ordinal independence in nonlinear utility theory. Journal of Risk and Uncertainty, 1(4), 355-387.
27. Hariri, A. R., Mattay, V. S., Tessitore, A., Kolachana, B., Fera, F., Goldman, D., Egan, M. F., & Weinberger, D. R. (2002). Serotonin transporter genetic variation and the response of the human amygdala. Science, 297(5580), 400-403.
28. Heath, C., & Tversky, A. (1991). Preference and belief: Ambiguity and competence in choice under uncertainty. Journal of Risk and Uncertainty, 4(1), 5-28.
29. Hsu, M., Bhatt, M., Adolphs, R., Tranel, D., & Camerer, C. F. (2005). Neural systems responding to degrees of uncertainty in human decision-making. Science, 310, 1680-1683.
30. Huberman, G. (2001). Familiarity breeds investment. The Review of Financial Studies, 14(3), 659-680.
31. Huettel, S. A., Stowe, C. J., Gordon, E. M., Warner, B. T., & Platt, M. L. (2006). Neural signatures of economic preferences for risk and ambiguity. Neuron, 49(5), 765-775.
32. Imwalle, D. B., Gustafsson, J. A., & Rissman, E. F. (2005). Lack of functional estrogen receptor influences anxiety behavior and serotonin content in female mice. Physiology and Behavior, 84(1), 157-163.
33. Jakobsdottir, J., Gorin, M. B., Conley, Y. P., Ferrell, R. E., & Weeks, D. E. (2009). Interpretation of genetic association studies: Markers with replicated highly significant odds ratios may be poor classifiers. PLoS Genetics, 5(2), e1000337.
34. Keynes, J. M. (1921). A treatise on probability. New York: Macmillan and Co., limited.
35. Kuhnen, C. M., & Chiao, J. Y. (2009). Genetic determinants of financial risk taking. PLoS One, 4(2), e4362.
36. Lesch, K. P., Bengel, D., Heils, A., Sabol, S. Z., Greenberg, B. D., Petri, S., Benjamin, J., Muller, C. R., Hamer, D. H., & Murphy, D. L. (1996). Association of anxiety-related traits with a polymorphism in the serotonin transporter gene regulatory region. Science, 274(5292), 1527-1531.
37. Li, D., Sham, P. C., Owen, M. J., & He, L. (2006). Meta-analysis shows significant association between dopamine system genes and attention deficit hyperactivity disorder (ADHD). Human Molecular Genetics, 15(14), 2276-2284.
38. Lowe, N., Kirley, A., Hawi, Z., Sham, P., Wickham, H., Kratochvil, C. J., Smith, S. D., Lee, S. Y., Levy, F., & Kent, L. (2004). Joint analysis of the DRD5 marker concludes association with attention-deficit/hyperactivity disorder confined to the predominantly inattentive and combined subtypes. The American Journal of Human Genetics, 74(2), 348-356.
39. Lund, T. D., Rovis, T., Chung, W. C. J., & Handa, R. J. (2005). Novel actions of estrogen receptor-{beta} on anxiety-related behaviors. Endocrinology, 146(2), 797-807.
40. Machina, M. J. (2004). Almost-objective uncertainty. Economic Theory, 24(1), 1-54.
41. Machina, M. J., & Schmeidler, D. (1992). A more robust definition of subjective probability. Econometrica, 60(4), 745-780.
42. McGough, J. J. (2005). Attention-deficit/hyperactivity disorder pharmacogenomics. Biological Psychiatry, 57(11), 1367-1373.
43. McIntyre, M. H., Kantoff, P. W., Stampfer, M. J., Mucci, L. A., Parslow, D., Li, H., Gaziano, J. M., Abe, M., & Ma, J. (2007). Prostate cancer risk and ESR1 TA, ESR2 CA repeat polymorphisms. Cancer Epidemiology, Biomarkers & Prevention, 16(11), 2233.
44. Munaf, M. R., Yalcin, B., Willis-Owen, S. A., & Flint, J. (2008). Association of the dopamine D4 receptor (DRD4) gene and approach-related personality traits: Meta-analysis and new data. Biological Psychiatry, 63, 197-206.
45. Neale, M. C., & Cardon, L. R. (1992). Methodology for genetic studies of twins and families. Netherlands: Kluwer Academic Publishers.
46. Quiggin, J. (1982). A theory of anticipated utility. Journal of Economic Behavior and Organization, 3(4), 323-343.
47. Ramsey, F. P. (1926). Truth and probability. Studies in Subjective Probability, 61-92.
48. Roe, B. E., Tilley, M. R., Gu, H. H., Beversdorf, D. Q., Sadee, W., Haab, T. C., Papp, A. C. (2009). Financial and psychological risk attitudes associated with two single nucleotide polymorphisms in the nicotine receptor (CHRNA4) gene. PLoS ONE, e6704.
49. Roiser, J. P., de Martino, B., Tan, G. C. Y., Kumaran, D., Seymour, B., Wood, N. W., & Dolan, R. J. (2009). A genetically mediated bias in decision making driven by failure of amygdala control. Journal of Neuroscience, 29(18), 5985-5991.
50. Savage, L. J. (1954). The foundations of statistics. New York: Wiley.
51. Schmeidler, D. (1989). Subjective probability and expected utility without additivity. Econometrica, 57(3), 571-587.
52. Takeo, C., Negishi, E., Nakajima, A., Ueno, K., Tatsuno, I., Saito, Y., Amano, K., & Hirai, A. (2005). Association of cytosine-adenine repeat polymorphism of the estrogen receptor-gene with menopausal symptoms. Gender Medicine, 2(2), 96-105.
53. Tversky, A., & Kahneman, D. (1992). Advances in prospect theory: Cumulative representation of uncertainty. Journal of Risk and Uncertainty, 5(4), 297-323.
54. Vanyukov, M. M., Moss, H. B., Kaplan, B. B., Kirillova, G. P., & Tarter, R. E. (2000). Brief research communication antisociality, substance dependence, and the DRD5 gene: A preliminary study. American Journal of Medical Genetics (Neuropsychiatric Genetics), 96, 654-658.
55. von Neumann, J., & Morgenstern, O. (1944). Theory of games and economic behavior. New York: Princeton University Press.
56. Westberg, L., Melke, J., Landen, M., Nilsson, S., Baghaei, F., Rosmond, R., Jansson, M., Holm, G., Bjntorp, P., & Eriksson, E. (2003). Association between a dinucleotide repeat polymorphism of the estrogen receptor alpha gene and personality traits in women. Molecular Psychiatry, 8(1), 118-122.
57. Zhong, S., Chew, S. H., Set, E., Zhang, J., Xue, H., Sham, P. C., Ebstein, R. P., & Israel, S. (2009a). The heritability of attitude toward economic risk. Twin Research and Human Genetics, 12(1), 103-107.
58. Zhong, S., Israel, S., Xue, H., Sham, P. C., Ebstein, R. P., & Chew, S. H. (2009b). A neurochemical approach to valuation sensitivity over gains and losses. Proceedings of the Royal Society B: Biological Sciences, 276, 4181-4188.
59. Zhong, S., Salomon, I., Xue, H., Ebstein, R. P., & Chew, S. H. (2009c). Monoamine oxidase A gene (MAOA) associated with attitude towards longshot risks. PLoS One, 4(12), e8516.
60. Zion, I. Z. B., Tessler, R., Cohen, L., Lerer, E., Raz, Y., Bachner-Melman, R., Gritsenko, I., Nemanov, L., Zohar, A. H., & Belmaker, R. H. (2006). Polymorphisms in the dopamine D4 receptor gene (DRD4) contribute to individual differences in human sexual behavior: Desire, arousal and sexual function. Molecular Psychiatry, 11(8), 782-786.