Ambiguity attitudes and myopic loss aversion: Experimental evidence using carnival games

A series of tailor made experiments were executed on a representative Indian household sample to investigate the influence of risky and ambiguous options on the choices made by the subjects. The objective of the study was to understand the impact of prior results on subsequent decisions made along with identifying role of demographic factors impacting their choices. The experiment showed that subjects displayed an escalation of commitment while playing the game in domains of losses. The results show that attitude of ambiguity aversion cannot be generalized in totality and role of cultural factors needs to be explored further.