 The first is that decision makers treat subjective (or unknown) probabilities differently from objective probabilities in their decision-making behavior. The classic example of this is the Ellsberg Paradox (Ellsberg 1961, 2001). Imagine you face an urn filled with 90 balls that are red, black, and yellow, from which a single ball will be drawn. You know that 30 of the balls are red, but you know nothing about the proportion of black and yellow balls. Do you prefer \(f_1\) or \(f_2\); and do you prefer \(f_3\) or \(f_4\)?