Description
Return known-minus-ambiguous equivalent premium.
Behavioral-economics tasks compare supplied payoffs, reference points, budgets and observed choices. A gap, dominance flag or response fraction illustrates a declared convention without identifying a psychological bias, predicting real choices or selecting a suitable financial action.
Return known-minus-ambiguous equivalent premium.
When to use this tool
Use Ambiguity Premium Known Unknown Gap when checking the stated experimental payoff, budget, reference or choice convention.
How to use the tool and how it works
- Enter knownEquivalent, ambiguousEquivalent, benchmarkValue. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read premium, normalizedPremium. Use the output convention below.
Return known-minus-ambiguous equivalent premium. Require benchmarkValue > 0; premium = knownEquivalent-ambiguousEquivalent, normalizedPremium divides by benchmark.1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| knownEquivalent | Known Equivalent | Required. Finite number. |
| ambiguousEquivalent | Ambiguous Equivalent | Required. Finite number. |
| benchmarkValue | Benchmark Value | Required. Finite number; strictly above 0. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| premium | Premium | Required. Finite number. |
| normalizedPremium | Normalized Premium | Required. Finite number. |
{
"input": {
"knownEquivalent": 50,
"ambiguousEquivalent": 40,
"benchmarkValue": 100
},
"output": {
"premium": 10,
"normalizedPremium": 0.1
}
}Limitations and assumptions
- Equivalents are supplied; no observed ambiguity aversion, utility model or financial recommendation is established.
- Inputs must satisfy both the field types and the cross-field conditions above. Invalid input causes an error; a successful false flag or documented placeholder is a different result.
- Numeric calculations use binary floating point unless exact decimal-integer arithmetic is explicitly stated. No hidden measurement tolerance or decimal rounding is added; nonfinite or out-of-contract results are rejected. Numeric signed-zero results are exported as zero.
Alternative or Complementary methods
Use a well-defined study design and complete data to estimate behavior; assess real financial rights, consequences and uncertainty independently.
References
Similar or alternative tools
- Sure Option Premium
Return a sure-option premium and reference-scaled value.
- Anchoring Adjustment Fraction Term
Return adjustment from an anchor as a share of a reference gap.