ABSTRACT
According to the well-known distinction attributed to Knight (1921), there are two kinds of uncertainty. The first, called “risk,” corresponds to situations in which all events relevant to decision making are associated with obvious probability assignments (which every decision maker agrees to). The second, called “(Knightian) uncertainty” or (following Ellsberg (1961)) “ambiguity,” corresponds to situations in which some events do not have an obvious, unanimously agreeable, probability assignment. As Chapter 1 makes clear, this collection focuses on the issues related to decision making under ambiguity. In this chapter, I briefly discuss the issue of the formal definition of ambiguity and ambiguity attitude.
