Individuals are often confronted with decisions in life, that involve the lack or absence of information about decision outcomes. If not enough information is provided to form several probability distributions at all, this is known as ambiguity. Existing literature shows that ambiguity affects decision making, which is also affected by the emotional state. This research investigates weather as a factor that may influence ambiguity attitudes via the emotional state, by combining data on decision making under ambiguity and the weather for the United States of America. Evidence shows a positive effect of the average daily wind speed on ambiguityaverse behaviour. However, precipitation, snowfall and temperature are not significant. When considering the four state regions of the United States, the results show that there is a difference in significance for several weather conditions between state regions. However, only the effect of snowfall on the ambiguity attitude for low likelihoods in the northeast region is statistically larger than in other state regions. Additional findings show that individuals are more ambiguityaverse for high likelihoods than for low likelihoods. Besides, having more trust in the financial stock market (decision making under ambiguity) makes individuals less a-insensitive.

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A. Baillon
Business Economics
Erasmus School of Economics

E.W. van Rumpt. (2016, October 20). The Effect of Weather on Ambiguity Attitudes: an Analysis on The United States of America. Business Economics. Retrieved from