Asset Investment Decisions Under Uncertainty

Uncertainty is everywhere in life.It affects not only the investment decisions of individuals,but also national economic policy making.Therefore,it is of great significance to study uncertainty.Investment and acquisition are the fields in which ambiguity is widely used in the financial market.Both of them are the games of investors on future returns.Most investments are based on information asymmetry,and the decision makers cannot fully grasp all the information of the acquired assets.Despite successful transactions,they fail to achieve expected gains and even suffer losses to varying degrees,thus falling into the "Winner’s Curse".And the "Takeover Game" is a powerful manifestation of the winner’s curse.This paper takes the Ellsberg ambiguity aversion theory as the starting point and the Takeover Game as the experimental basis.This paper investigates the bidding performance of buyers in the context of uncertain future outcome of asset value.In this paper,uncertainty is clearly divided into two environments: risk and ambiguity,namely probability distribution of knowing the future outcome of asset value and probability distribution of not knowing the future outcome of asset value.After simplifying the rules of the game and removing the middleman and the seller,the possible value of the asset is 0 or 100.This paper introduces the variable of probability into the experiment.According to the distribution of probability and the number of rounds,this paper sets four treatments,namely KP,UP,KPUP and UPKP.Each treatment contains 2 groups of experiments,each group contains 40 rounds of decision-making experiments,and each group contains 28 people,from which 8960 sample data are collected.According to the experimental analysis,the preliminary conclusions are as follows: first,in the environment where the asset value is fuzzy,the probability of the buyer to bid 0 for the asset is significantly lower than that in the environment where the asset value is clear.The decision maker does not have a significant tendency of " ambiguity aversion." Second,in the same decision-making environment,multiple rounds of repeated decisions have obvious learning effect,that is,the decision makers will optimize the performance in the later experiments.Third,the decision makers are not completely "rational".There are other bids besides 0 and 100 and a large proportion of decision makers overbid.Fourth,the decision makers have obvious heterogeneity in bidding behavior.Finally,there is the gambler’s fallacy in the bidding process.