Risk and the Individual
Decision Making Process
Robyn S. Wilson, PhD
Assistant Professor of Risk Analysis and Decision Science
Environmental Social Sciences Lab
Sea Grant Climate Network Workshop
Communications and Social Science Panel
Charleston, SC
November 9th, 2009
COLLEGE OF FOOD, AGRICULTURAL, AND ENVIRONMENTAL SCIENCES
SCHOOL OF ENVIRONMENT AND NATURAL RESOURCES
Overview
• How do humans make decisions?
• What does this tell us about the role of risk in
decision making?
• How are these modes of processing reflected
in models of decision making?
• What does this tell us about how to encourage
more informed choices in light of risk and
uncertainty?
How do humans make decisions?
• The human brain has two systems
involved in information processing and
decision making:
– Experiential system
– Analytic system
The Dual Processing System
Experiential System
• Intuitive, fast, instinctual,
unconscious
• Occurs first guiding future processing
and judgment
• Relies on associations developed
through experience (heuristics!)
• Motivates action and narrows down
the initial set of options
• Drives risk perception
– Risk = Dreaded x Unknown
Analytic System
• Slow, effortful, conscious
• Occurs after the experiential
system engages
• Associated with intellect, logic and
reason
• Allows for a more deliberative
consideration of remaining options
• Drives risk assessment
– Risk = Probability x Consequence
The Need for Balance
The experiential and analytic systems should work
in unison, each depending on the other for
guidance.
The experiential system engages the decision maker
and narrows down the options that must then be
considered further using the analytic system.
When things are out of balance…
Both potentially catastrophic risks with
unknown probabilities of occurrence
Terrorism vs. Climate Change
• 9/11 created images that incite intense feelings of
dread, lack of control, fear, outrage (Sunstein, 2006)
– Heightens a reliance on the experiential system
– Leads to actions driven by perceived as opposed to
assessed risk (use of experiential not analytic system)
• Climate change has not experienced such an event
Models of Decision Making
• Both the analytic and experiential modes of
decision making are reflected in two main
models of decision making
– Normative: Economically derived theories and
axioms that predict how we should perform under
ideal conditions (analytic risk assessment)
– Descriptive: Behaviorally derived theories that
predict how we actually perform under less than
ideal conditions (experiential risk perception)
Models of Decision making
• Ideal conditions??
–
–
–
–
–
–
–
…Perfect information
…No time limitations
…Static weights
…Unlimited processing ability
…Precise processing ability
…Efficient processing ability
…etc.
Descriptive Models
• Given less-than-ideal conditions,
normative models and analytic
assessments of risk are great in
theory but not reflected in practice
• Descriptive models demonstrate
that individuals satisfice, or make
decisions based on values or
objectives that are salient at the
time, but that do not necessarily
lead to the optimal choice
Herbert Simon, 1916-2001
Nobel Prize (Economics), 1978
Street Calculus
By Garry Trudeau
So how do we encourage more
informed choices?
• We can trick the decision maker…
– Taking advantage of the experiential system to create
fear, outrage, etc. and heighten risk perceptions
which often drive decisions when uncertainty is
present
• We can treat the decision maker…
– Encouraging a careful balance of the experiential and
analytic systems and assisting people in behaving
more normatively in their decision making
– These are prescriptive models of decision making!
Prescriptive Models
• They are meant to…
– Decompose problems into cognitively
manageable parts
– Create a balance between analytic and
experiential systems
– Deliberately incorporate science and values
– Carefully construct preferences (which are
extremely malleable and inconsistent) to
ensure more informed choices
Structured Decision Making
• Carefully define the problem
• Consider objectives
• Identify or analyze potential alternatives
• Establish the consequences of each alternative with respect to its
ability to meet stated objectives
• Address the tradeoffs that each alternative entails
Sometimes…
• Simplify decisions involving uncertainty
• Account for risk tolerance
• Think about future decisions
Questions?
Robyn Wilson
[email protected]
614.247.6169
http://www.senr.osu.edu/
COLLEGE OF FOOD, AGRICULTURAL, AND ENVIRONMENTAL SCIENCES
SCHOOL OF ENVIRONMENT AND NATURAL RESOURCES