Previous research in economics, specifically Daniel Ellsberg's seminal work, has shown that individuals tend to exhibit ambiguity aversion, i.e., avoid choosing ambiguous options — options for which individuals cannot access precise probabilities of possible outcomes.

The literature standardly assumes that this aversion stems from the belief that ambiguous options may result in worse outcomes than risky or certain options. Hence, ambiguity aversion is conceptualized as a choice-outcome phenomenon.

My job market paper presents…