Cognitive Abilities and Ambiguity Attitudes

This thesis investigates the relationship between ambiguity attitudes and cognitive abilities. The question Can some measures of cognitive abilities partially explain the ambiguity attitudes of an individual, and if so, what is the relationship between ambiguity attitudes and cognitive abilities? is investigated in this research. This research uses survey data from a representative panel of respondents from the Netherlands. Two components of ambiguity attitudes, ambiguity aversion and ambiguity generated likelihood insensitivity, are measured through matching probabilities following Dimmock, Kouwenberg and Wakker (2016). I considered two measures of cognitive abilities: the Cognitive Reflection Test and the Numeracy test. There does not seem to be a relationship between elicited ambiguity attitudes and the measures of cognitive abilities, the measures of cognitive abilities are not explanatory for the ambiguity attitude components. Further research should point out whether the results are robust and can be generalised to other populations.