Risk- How should we make decisions when all relevant alternatives, consequences, and probabilities are known? This world requires statistical thinking. The think you would find spread on internet. "Write the pros and cons, weigh them and decide". our world is not of that kind. Our world is ofUncertainty- How should we make decisions when NOT all relevant alternatives, consequences, and probabilities are known? This world requires smart rule of thumb (heuristics) and intuition. You can't have statistical thinking while deciding your spuse or like that. We don't know all the probabilities.

Risk VS Uncertainty

<ol><li>The best decision under risk is not the best decision under uncertainty.</li><li>Heuristics are indispensable for good decision under uncertainty. They are not a product of a flawed mental system.</li><li>Complex problems do not require complex solutions.</li><li>More information, time, and computation is not always better. (Less is more)</li></ol>

Gerd Gigerenzer is Director at the Max Planck Institute for Human Development and Director of the Harding Center for Risk Literacy in Berlin. He is former Professor of Psychology at the University of Chicago and John M. Olin Distinguished Visiting Professor, School of Law at the University of Virginia. He is also Batten Fellow at the Darden Business School, University of Virginia, and Fellow of the Berlin-Brandenburg Academy of Sciences and the German Academy of Sciences. Awards for his work include the AAAS Prize for the best article in the behavioral sciences and the Association of American Publishers Prize for the best book in the social and behavioral sciences. This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at http://ted.com/tedx

leadershipandmanagement

Leadership & Management

Gerd Gigerenzer is Director at the Max Planck Institute for Human Development and Director of the Harding Center for Risk Literacy in Berlin. He is former Professor of Psychology at the University of Chicago and John M. Olin Distinguished Visiting Professor, School of Law at the University of Virginia. He is also Batten Fellow at the Darden Business School, University of Virginia, and Fellow of the Berlin-Brandenburg Academy of Sciences and the German Academy of Sciences. Awards for his work include the AAAS Prize for the best article in the behavioral sciences and the Association of American Publishers Prize for the best book in the social and behavioral sciences.

This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at http://ted.com/tedx

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How do smart people make smart decisions? | Gerd Gigerenzer | TEDxNorrköping

Risk VS Uncertainty

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