On Ellsberg’s commitment to dealing with the uncertainty of the real world

Carlo Zappia

Cambridge Journal of Economics, 2025, vol. 49, issue 6, 1451-1468

Abstract: This paper aims to explore what kind of ontological presuppositions can be ascribed to Daniel Ellsberg’s understanding of decision-making in the real world. Contrary to what can be inferred from the famous 1961 Quarterly Journal of Economics article introducing the Ellsberg Paradox, an analysis of the then classified research that Ellsberg conducted at the RAND Corporation in the early 1960s shows that his interest in decision-making as a field of applied research led him to emphasise the state-space uncertainty of an unprecedented state of affairs. Ellsberg seemed determined to assert that the kind of uncertainty he was examining—the ability of a chain of command to cope with the event of a surprise nuclear attack in the unprecedented environment of a cold war—was of the highest severity. The paper argues that in such a context the analogy between Ellsberg and George Shackle is striking. The undesirable ontological implication of the assumption of a complete list of possible events evidenced by Shackle—that it is incompatible with surprise—is shared by Ellsberg.

Keywords: Ambiguity; Fundamental uncertainty; Surprise (search for similar items in EconPapers)
Date: 2025
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