Blind man deduces his hat after two sighted men fail

From a box of $3$ blue and $2$ red hats, three men each receive one hat. Two of the men can see; the third is blind. The first sighted man looks at the other two and says he cannot tell his own colour; then the second sighted man, having heard this, says the same. The blind man now announces his colour correctly. What colour is it, and how does he know?

Blue. The first man's failure rules out the other two both wearing red. If the blind man wore red, the second man would see it and conclude he himself must be blue; since he could not, the blind man's hat is blue.