In nine studies, we find that investors intuitively distinguish two independent dimensions of uncertainty: epistemic uncertainty that they attribute to missing knowledge, skill, or information, versus aleatory uncertainty that they attribute to chance or stochastic processes. Investors who view...

People view uncertain events as knowable in principle (epistemic uncertainty), as fundamentally random (aleatory uncertainty), or as some mixture of the two. We show that people make more extreme probability judgments (i.e., closer to 0 or 1) for events they view as entailing more epistemic...