We report the results of an experiment which investigates the impact of the manner in which likelihood information is presented
to decision-makers on valuations assigned to lotteries. We find that subjects who observe representative sequences of outcomes
attach higher valuations to lotteries than those who are given only a verbal description of a probability distribution. We
interpret this in terms of a reduction in ambiguity about the possible lottery outcomes. These findings suggest that ambiguity
aversion may be a confounding factor in reported experimental violations of expected utility theory based on verbal descriptions
of probability distributions.
Keywords ambiguity - probability learning - competence and comprehension hypotheses - experiment - lottery valuations
Jel classification D81 - C91