# Knightian Uncertainty `”Uncertainty must be taken in a sense radically distinct from the familiar notion of Risk, from which it has never been properly separated…. The essential fact is that ‘risk’ means in some cases a quantity susceptible of measurement, while at other times it is something distinctly not of this character; and there are far-reaching and crucial differences in the bearings of the phenomena depending on which of the two is really present and operating…. It will appear that a measurable uncertainty, or ‘risk’ proper, as we shall use the term, is so far different from an unmeasurable one that it is not in effect an uncertainty at all.”` * [[Risk, Uncertainty, and Profit]] `“There is a fundamental distinction between the reward for taking a known risk and that for assuming a risk whose value itself is not known. A known risk is easily converted into an effective certainty, while true uncertainty, not susceptible to measurement.”` (Paraphrased by [Explained: Knightian uncertainty | MIT News | Massachusetts Institute of Technology](https://news.mit.edu/2010/explained-knightian-0602)) The inability to predict, even probabilistically, what will happen Knightian uncertainty is anchored on the idea of imperfect knowledge about outcomes in situations where it is hard to measure those outcomes. A corollary is that [[Uncertainty always involves risk but risk does not always involve uncertainty]]. [Web URL for this note](http://notes.benjaminreinhardt.com/Knightian+Uncertainty) [Comment on this note](http://via.hypothes.is/http://notes.benjaminreinhardt.com/Knightian+Uncertainty)