Recordings of Independent Interest from the Course Risk and Ambiguity
Peter P. Wakker
Several recordings may be of interest on their own, and can be watched separately from the rest. They are listed below.
(They are all on
my youtube channel
in the Section "Course Risk & Ambiguity: Parts of Independent Interest.")

Survey on "current" (2022) ambiguity theories (53 minutes total)

Intuitive/psychological/graphical explanation of Quiggin's invention of rank dependence (41 minutes total)

Allais paradox (20 minutes)
Normative discussion; most controversial debate on rationality in decision theory

Rabin’s paradox (13 minutes)
Shows how an expected utility analysis that ignores loss aversion can go very wrong.

Ellsberg paradox (6 minutes)
(≈ homebias from finance).
Shows that we have to reckon with ambiguity aversion and go beyond classical probability theory.

A paradox illustrating the importance of reference dependence (18 minutes)

Bookmaking, arbitrage, and behavioral foundations (14 minutes)
(Uses some preference conditions defined elsewhere, but general message can be understood.) Importance/wide implications of de Finetti’s bookmaking theorem (noarbitrage in finance; Bayesian statistics). To convince you that, as “homework for next week,” you should cancel all your small insurances, increasing your income by 0.5% for the rest of your life.
Also, general importance of preference foundations, normatively & descriptively

Prescriptive application of expected utility (18 minutes)
Shows, using a medical application, how expected utility is applied prescriptively to improve decisions; using simple hypothetical decisions (such as used in utility measurements) to clarify complex real decisions.

Graphical illustration of pessimism and insensitivity (9 minutes)
The two major components of probability weighting