Ellsberg’s Paradox Imagine an urn known to contain 90 balls. Thirty of the balls are red, the remaining 60 are black and yellow in unknown proportions. One ball is to be drawn at random from the urn. Consider the following actions and payoffs: Situation X 30 60 Red Black Yellow Act 1. Bet on red $100 $0 $0 Act 2. Bet on black $0 $100 $0 Situation Y Act 3. Bet on red or yellow $100 $0 $100 Act 4. Bet on black or yellow $0 $100 $100