Knightian uncertainty  In economics, Knightian uncertainty is a lack of any quantifiable knowledge about some possible occurrence, as opposed to the presence of quantifiable risk (e.g., that in statistical noise or a parameter's confidence interval). The concept acknowledges some fundamental degree of ignorance, a limit to knowledge, and an essential unpredictability of future events. Knightian uncertainty is named after University of Chicago economist Frank Knight (1885–1972), who distinguished risk and uncertainty in his 1921 work "Risk, Uncertainty, and Profit:"  In this matter Knight's own views were widely shared by key economists in the 1920s and 1930s who played a key role distinguishing the effects of risk from uncertainty. They were particularly concerned with the different impact on human behavior as economic agents. Entrepreneurs invest for quantifiable risk and return; savers may mistrust potential future inflation. Whilst Frank Knight's seminal book elaborated the problem, his focus was on avoiding intervention in markets. Work on estimating and mitigating uncertainty was continued by G. L. S. Shackle who later followed up with Potential Surprise Theory. However, the concept is largely informal and there is no single best formal system of probability and belief to represent Knightian uncertainty. Economists and management scientists continue to look at practical methodologies for decision under different types of uncertainty. The difference between predictable variation and unpredictable variation is one of the fundamental issues in the philosophy of probability, and different probability interpretations treat predictable and unpredictable variation differently. The debate about the distinction has a long history. The Ellsberg paradox is based on the difference between these two types of imperfect knowledge, and the problems it poses for utility theory – one is faced with an urn that contains 30 red balls and 60 balls that are either all yellow or all black, and one then draws a ball from the urn. This poses both "uncertainty" – whether the non-red balls are all yellow or all black – and "probability" – whether the ball is red or non-red, which is ⅓ vs. ⅔. Expressed preferences in choices faced with this situation reveal that people do not treat these types of imperfect knowledge the same. This difference in treatment is also termed "ambiguity aversion". A black swan event, as analyzed by Nassim Nicholas Taleb, is an important and inherently unpredictable event that, once occurred, is rationalized with the benefit of hindsight. Historical developments like the widespread adoption of the personal computer, were entirely impossible to predict but nevertheless had world-changing effects.