Your task is to replicate the experiment reported by Pulford & Collman (2008) showing the persistence of the ambiguity aversion effect irrespective of the urn size. The ambiguity aversion effect,...

Your task is to replicate the experiment


reported by Pulford & Collman (2008)


showing the persistence of the ambiguity


aversion effect irrespective of the urn size.


The ambiguity aversion effect, first discussed


by Ellsberg (1961), consists
in
people’s

tendency
to prefer risky choices when the


outcome is 50:50, against choices with


unknown outcomes. Imagine you are standing


in front of two urns, one containing 50 red


and 50 blue marbles and another urn


containing 100 red and blue marbles in


unknown proportions. You are asked to blindly draw a marble from one of the urns and you will win


a prize if that marble is red. In such scenario, most people prefer the 50:50 urn and according to


utility theory (and intuition perhaps), this means that they deem (a) the chance of drawing a red


marble from the ambiguous urn to be less than 0.5, and consequently (b) the chance of drawing a


blue marble from the ambiguous urn to be more than 0.5.


The paradox arises when the same decision maker that chose the 50:50 urn is asked to choose an


urn for the second time, this time aiming to get a blue marble. It has been shown in multiple studies


that the aversion towards unknown outcomes remains, with the majority of people still picking the


50:50 urn, even though according to (b) there’s a higher chance of drawing a blue marble from the


ambiguous urn.


In the experiment you are asked to replicate, the researchers investigated the extent to which the


aversion to unknown outcomes is dependent on the urn size, i.e. the number of marbles in the urns.


Therefore, they asked three groups of participants to make a single choice between the 50:50 and


the ambiguous urn, while varying the number of marbles in each urn between the groups (2,10 and


100). The experiment was conducted in the traditional way, by asking participants to physically draw


marbles from actual urns and to note down their choices on paper. Your task is to transfer the same


experiment to a computer
program,
while trying to replicate the original experiment as
close
as


possible.