The story
Popularized by Daniel Ellsberg in his 1961 paper “Risk, Ambiguity, and the Savage Axioms”, although a version of it was noted considerably earlier by John Maynard Keynes.
Etymology from Wiktionary, CC BY-SA 4.0.
Ellsberg paradox
Today it means: A paradox of choice in which people's decisions produce inconsistencies with subjective expected utility theory. Full definition →