Ellsberg paradox

The Ellsberg Paradox is a dilemma named after economist, academic and author Daniel Ellsberg. In this dilemma, you are asked to choose between two different colored boxes, each of which contains some hidden and unknown prize. You are told that one box has real money in it, while the other box contains either real money or some worthless items. You have to choose a box without knowing what is in it.

It’s a paradox because it’s really confusing. Even though we don’t know what is in the boxes, we think we should have an opinion on which one to pick. We think we should prefer the box with real money because we know it has something valuable in it. But, at the same time, we don’t want to end up with the box full of worthless items, so we don’t want to pick it either. The paradox is that even though we don’t have all the information about which box to pick, we still think we should know which one to choose.