Below is an excerpt from Jonh Ridgway’s book review of “Waltzing with Bears“, which is about software project risk management.  The general concept of epistemic vs. aleatory uncertainty is very important.

[…] Do yourself a favour, ignore what the book says about risk analysis [for software projects] and go and buy a good book on Bayesian Methods and Decision Theory. You don’t have to take my word for this, just type in ‘epistemic uncertainty and Monte Carlo’ into your Internet search engine and take it from there. In the meantime, here are some background notes to help explain my remarks:

There are two types of uncertainty: epistemic and aleatory. As the name suggests, epistemic uncertainty results from gaps in knowledge. For example, one may be uncertain of an outcome because one has never used a particular technology before. Such uncertainty is essentially a state of mind and hence subjective. Aleatory uncertainty results from variability that is intrinsic to the behaviour of some systems [like throwing dice] (alea is the Latin for die). For example, I can be confident regarding the long term frequency of throwing sixes but I remain uncertain of the outcome of any given throw of a dice. This uncertainty can be objectively determined. Continue reading →