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It is the case if the balls are being put back. As you play more games, you would figure out the proportion of red and green balls in the second urn. Therefore,
by 317070 3y ago
It is the case if the balls are being put back. As you play more games, you would figure out the proportion of red and green balls in the second urn. Therefore, you would figure out which is the better colour.
Repeated games under epistemic uncertainty actually allows you to get an edge by extracting information and reducing that uncertainty, in comparison to a game which is guaranteed to have no edge for you.
- cubefox 3y agoYeah, but that would change an unknown distribution to a known distribution. Then the Ellsberg paradox does no longer apply.
- 317070 3y agoYes, but why do we intuitively avoid epistemic uncertainty, even though it is something which can only _give_ us an edge here? To make clear: playing this game with an urn which has an equal amount of red and green balls, is the worst case scenario when you get to pick the colour that wins. The second urn can only be the same or better, whether or not you can figure out any information about the balls in it.
- deleted 3y ago[deleted]
- gonehome 3y agoIn a one time game it’s a 50% known bet vs. an unknown bet. 50% is not bad odds?
- peteradio 3y agoBecause the real consequence of losing is not $0, so there is (potentially unacceptable) cost to gain knowledge which gives you enough edge to win?
- cubefox 3y agoIt can only give us an edge in the repetition case. And the Ellsberg paradox doesn't apply to the repetition case. Ellsberg doesn't say anything about people preferring the first urn in the repetition case. In fact, I see no evidence that they do.
- gameman144 3y agoReducing the uncertainty does not give you an edge vs having certainty a priori though. For instance, you are not better off discovering that the urn has a 50:50 ratio than you would be if you knew that 50:50 ratio ahead of time. If you're saying that you could discover a better ratio, then the thing that gives you the edge is the better ratio itself; if you knew the better ratio ahead of time, the epistemic uncertainty would only harm you.