Today, Democracy Now aired an interview with Daniel Ellsberg to discuss the new movie The Most Dangerous Man in America regarding Dr. Ellseberg's work during the Nixon administration and his leaking of Pentagon papers regarding the Vietnam war.

Dr. Ellsberg is know to graduate microeconomics students for his popularizing of what is known as the Ellsberg paradox:

Suppose you have an urn containing 30 red balls and 60 other balls that are either black or yellow. You don't know how many black or yellow balls there are, but that the total number of black balls plus the total number of yellow equals 60. The balls are well mixed so that each individual ball is as likely to be drawn as any other. You are now given a choice between two gambles:

Gamble A Gamble B You receive $100 if you draw a red ball You receive $100 if you draw a black ball Also you are given the choice between these two gambles (about a different draw from the same urn):

Gamble C Gamble D You receive $100 if you draw a red or yellow ball You receive $100 if you draw a black or yellow ball Since the prizes are exactly the same, it follows that you will

preferGamble A to Gamble Bif, and only if, you believe that drawing a red ball is more likely than drawing a black ball (according to expected utility theory). Also, there would be no clear preference between the choices if you thought that a red ball was as likely as a black ball. Similarly it follows that you willpreferGamble C to Gamble Dif, and only if, you believe that drawing a red or yellow ball is more likely than drawing a black or yellow ball. If drawing a red ball is more likely than drawing a black ball, then drawing a red or yellow ball is also more likely than drawing a black or yellow ball. So, supposing youpreferGamble A to Gamble B, it follows that you will alsopreferGamble C to Gamble D. And, supposing instead that youpreferGamble D to Gamble C, it follows that you will alsopreferGamble B to Gamble A.When surveyed, however, most people

strictly preferGamble A to Gamble B and Gamble D to Gamble C. Therefore, some assumptions of the expected utility theory are violated.

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