# @stem_antics on Instagram

- **Type:** Video
- **Original URL:** https://www.instagram.com/p/DZv0SFhgUiP
- **Gondola URL:** https://gondola.cc/posts/66891675-stem-antics-instagram
- **Thumbnail:** https://img.gondola.cc/tr:w-,h-,fo-auto/postThumbnails/7d0408c8a7.jpg
- **Posted:** 2026-06-19T00:22:59.000+00:00
- **Account Owner:** Stem Antics (@stem_antics) — https://gondola.cc/stem_antics

## Caption

Imagine an urn with 90 balls. Exactly 30 are red. The other 60 are black or yellow in some unknown mix — could be all black, could be all yellow, you aren’t told.

Bet A pays out if you draw red. Bet B pays out if you draw black. Most people take A.

Now two new bets. Bet C pays if you draw red or yellow. Bet D pays if you draw black or yellow. Most people take D.

Those two choices can’t coexist under expected utility theory, and that’s the whole point.

Preferring A over B says you act as if red is more likely than black. Preferring D over C says the opposite, that black beats red. Yellow sits in both C and D, so it cancels. Strip it out and D over C reduces to black over red. You’ve contradicted yourself.

Daniel Ellsberg laid this out in 1961, the same Ellsberg who later leaked the Pentagon Papers. His target was Leonard Savage’s sure-thing principle: a shared outcome common to two options shouldn’t sway your ranking between them. People break this rule reliably.

The driver is ambiguity aversion. Red is a known one-in-three. Black is a guess about a hidden proportion. Faced with equal expected value, people flee the unmeasured distribution and cling to the measurable one. This is the gap Frank Knight drew in 1921 between risk, where odds are known, and uncertainty, where they aren’t.

Standard theory says a rational agent pins one probability to every event. Ellsberg showed we don’t. Later work formalized the fix: Gilboa and Schmeidler’s 1989 maxmin model lets you hold a whole set of distributions and evaluate each bet by its worst case inside that set. Aversion to the unknown stops being a flaw and becomes a decision rule.

The map is not the territory, and some part of us already knows it.

#stemantics #behavioraleconomics #decisiontheory #ellsbergparadox #cognitivebias

## Stats

- **Views:** 2,187
- **Likes:** 123
- **Shares:** 0
- **Comments:** 4

## Tags

cognitivebias, decisiontheory, ellsbergparadox, behavioraleconomics, stemantics

---
Copyright (c) Gondola