Risk, ambiguity, and decision

This foundational work by Daniel Ellsberg explores the complexities of decision-making under conditions of risk and ambiguity. It critically examines traditional theories of rational choice, particularly expected utility theory, by introducing the concept of ambiguity aversion. Ellsberg's analysis reveals how individuals often prefer known risks over unknown ones, even when the probabilities are objectively the same, with significant implications for economics, philosophy, and behavioral science.