AMBIGUITY AVERSION People prefer known risks over unknown risks. DANIEL ELLSBERG (b. 1931) Economist, Activist 1961 Ellsberg paradox: thought experiment showed people’s overwhelming preference for gambling on known chances over unknown chances. 2010 (Alary): In the real world, ambiguity aversion leads to an increased demand for insurance because people are averse to unknown events that will affect their lives. Transport for London (TFL): Pedestrian Countdown at Traffic Signals The introduction of countdown timers between red and green pedestrian signals makes the “risk” of crossing the road known and increases feelings of safety.