Decision under risk: From the field to the lab and back

Fox, C., Erner, C., & Walters, D. (forthcoming). Few topics attract as much attention across the social and behavioral sciences as risk. Enter “risk” as a search term in Google or in the books section at Amazon, and you will turn up more results than searches for terms such as “judgment,” “decision,” or even “happiness.” Despite all of this interest, most lay people, professionals, and clinical researchers understand risk very differently than do decision theorists. For instance, the Oxford English Dictionary defines risk as “exposure to the possibility of loss, injury, or other adverse or unwelcome circumstance; a chance or situation involving such a possibility.” That accords with the clinical definition of risk which includes behaviors that can result in loss or harm to oneself or others such as skydiving, recreational drug use, and unprotected sex (e.g., Furby & Beyth-Marom, 1992; Steinberg, 2008), and it likewise accords with the view of managers who see risk as exposure to possible negative outcomes (March & Shapira, 1987). Psychometric studies of risk intuitions similarly implicate exposure to potential dangers, revealing a dread component that is characterized by lack of control or potential catastrophic consequences, and an unknown component that is characterized by unobservable, unknown, or delayed consequences (Slovic, 1987).

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Subjective probability assessment in decision analysis

Fox, C.R., & Clemen, R.T. (2005). Subjective probability assessment in decision analysis: Partition dependence and bias toward the ignorance prior. Management Science, 51, 1417-1432. (Named Best Paper in Decision Analysis 2005, INFORMS).

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