Stuff To Blow Your Mind

The Devil You Know, Part 1

Aug 26, 2025
Dive into the fascinating world of ambiguity aversion, where fear of the unknown influences our decisions. Learn about the Ellsberg paradox and its implications on human behavior. Explore the madman theory in nuclear strategy, examining how unpredictability can impact international relations. Reflect on historical events like the Pentagon Papers that illustrate the consequences of choosing the comfort of known risks. Finally, discover the benefits of embracing uncertainty for personal growth and exciting opportunities.
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INSIGHT

Ambiguity Aversion Defined

  • Ambiguity aversion is our tendency to prefer known probabilities over unknown ones even without reason to think the unknown is worse.
  • The phrase "better the devil you know" captures this bias and its grip on decisions.
ANECDOTE

Ellsberg: Scholar And Whistleblower

  • Daniel Ellsberg worked at RAND and leaked the Pentagon Papers exposing Vietnam War deception.
  • His career combined formal decision theory critique with anti-nuclear and whistleblower activism.
INSIGHT

Ellsberg's Urn Reveals The Paradox

  • The Ellsberg three-color urn shows people favor known 1/3 odds for red over ambiguous odds for black despite no objective reason.
  • People choose certainty about probabilities rather than maximize expected payoff.
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