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The University of Southampton
CORMSIS Centre for Operational Research, Management Sciences and Information Systems

CORMSIS Seminar Event

Time:
16:00 - 17:00
Date:
18 December 2014
Venue:
2/3043

For more information regarding this event, please telephone Sally Brailsford on +23567 or email S.C.Brailsford@soton.ac.uk .

Event details

DECISIONS UNDER RISK AND UNDER UNCERTAINTY: ARE THEY DIFFERENT? SHOULD THEY BE?

In decisions under risk, the alternative options, their possible outcomes and the probabilities with which these outcomes are obtained are known. In decisions under uncertainty, some of these options, outcomes or probabilities are not known. I point out that standard decision theoretic models tend to apply just to decisions under risk. But, except for some situations such as playing in casinos, most decisions are in practice decisions under uncertainty, and there is consensus that people then use simple rules of thumb.

I go one step further and use evidence from a host of laboratory experiments to argue that people use simple rules of thumb to make decisions under risk as well. Finally, based on examples from diverse fields such as sports, health, peacekeeping and economics, and based on more general analyses, I present conditions under which simple rules of thumb lead to good decisions and under which they do not.

Speaker information

Konstantinos Katsikopoulos,Max Plank Institute for Human Development, Dr. Konstantinos Katsikopoulos studied cognitive psychology and applied mathematics and obtained a Ph.D. in operational research from the University of Massachusetts Amherst. Then, he was a visiting assistant professor of engineering systems at the Massachusetts Institute of Technology. Now at the Max Planck Institute for Human Development, he serves as the deputy director of the Centre for Adaptive Behaviour and Cognition. He is on the editorial board of the journal Judgment and Decision Making. He has received a German Science Foundation Fellowship for Young Researchers and also won a grant from the Berlin Institute for Advanced Study to organize the 2014 Blankensee Colloquium on the comparative analysis of nudge, boost and design.

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