Institute of International Management, National Cheng Kung University, Taiwan
Uncertainty: Ambiguity and Risk;
Knight (1921), who first highlighted them, used the term uncertain for what is less ambiguously called ambiguous and gave an example of two men drawing balls from an urn: ‘‘One man knows that there are red and black balls, but is ignorant of the numbers of each; another knows that the numbers are three of the former to one of the latter” (pp. 218–219). Knight, F. H. (1981). Risk, uncertainty and profit. Boston: Houghton, Schaffner & Marx.
Ellsberg paradox (1961)
Risk model: von Neumann and Morgenstern (1947), then Allais (1953) experiments
Etner, J., Jeleva, M., & Tallon, J. M. (2012). Decision theory under ambiguity. Journal of Economic Surveys, 26(2), 234-270.