Risk and Uncertainty

‘The economist Frank Knight drew a distinction between risk and uncertainty. Risk, he argued, is something you can calculate – the probability of someone losing at roulette. Uncertainty, though, arises when the odds of success or failure are incalculable – the probability of someone deciding to play roulette in the first place, and being pickpocketed on the way out of the casino.’ – James Surowiecki, THE FINANCIAL PAGE