Risk, Ambiguity, and the Savage Axioms

Ellsberg · Voice & Silence · The Quarterly Journal of Economics · 1961 · Open access

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The paper that introduced the Ellsberg paradox — demonstrating that people systematically prefer known-probability risks over unknown-probability ambiguity, violating expected utility theory. Foundational for understanding ambiguity aversion: the preference for a calculable risk over an incalculable one explains part of why people stay silent when they cannot predict how voice will land.

Ellsberg, D. (1961) 'Risk, ambiguity, and the Savage axioms', The Quarterly Journal of Economics, 75(4), pp. 643–669.

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