Aurora Borealis
11 January 2019 Multimedia

Decision Making under Uncertainty – Less Is More

  1. Gerd Gigerenzer

What is the difference between risk and uncertainty, and what implication does this difference have for decision making? This distinction is important in finance where pricing and investment decisions often use complex models that use assumed distribution to encapsulate risk. In reality,  however, it can be argued that the future is inherently one of uncertainty and cannot be captured via a probability distribution and that a heuristic approach to decision making might be optimal. This leads to the proposition that less is more and that a heuristic approach, using less information, can produce better outcomes than a complex model dependent on numerous assumptions.

The Take 15 Series is a collection of illuminating, short conversations with noted economists, best-selling authors, leading researchers, and successful practitioners on topics ranging from geopolitics and whistleblowing to irrationality and outlooks.

We’re using cookies, but you can turn them off in Privacy Settings.  Otherwise, you are agreeing to our use of cookies.  Accepting cookies does not mean that we are collecting personal data. Learn more in our Privacy Policy.