Why people struggle to understand climate risk

Placed beforerand you are two urns. Each contains 100 balls. You are given a clear description of the first urn’s contents, in which there are 50 red balls and 50 black balls. The economist running the experiment is tight-lipped about the second, saying only that there are 100 balls divided between red and black in some ratio. Then you are offered a choice. Pick a red ball from an urn and you will get a million dollars. Which urn would you like to pull from? Now try again, but select a black ball. Which urn this time?Most people plump for the first urn both times, despite such a choice implying that there are both more and fewer red balls than in the second urn. This fact is known as the Ellsberg paradox after Daniel Ellsberg, a researcher at the corporation, a think-tank, better known for leaking documents detailing America’s involvement in the Vietnam war. Ellsberg, who died on June 16th, called the behaviour ambiguity aversion. It was a deviation from the model of rational choice developed by John von Neumann, a mathematician, and a demonstration that knowing the likelihood of something can alter decision-making.