Tim Pleskac
(Max Planck Institute for Human Development)
Ecologically rational choice and the structure of the
environment
In life risk is reward. This relationship between risk and reward or probabilities and payoffs seems obvious to
many. Yet theories of decision making have largely ignored it. We conducted an ecological analysis of life’s gambles.
Across all domains, payoffs and probabilities proved intimately tied, with payoff magnitudes signalling their
probabilities. In some cases, the relationship is due to economic constraints, but in others it arises even despite
economic constraints. We show that people exploit this relationship in the form of a heuristic—the risk–reward
heuristic—to infer the probability of a payoff during decisions under uncertainty. We show how the heuristic can
explain ambiguity aversion. More broadly, we argue that this ecological relationship can inform our understanding
of choice under risk and uncertainty.
Thursday 9th October 2014, 2.30 p.m.— 3.50 p.m.
Library, 3rd Floor Extension, Wolfson Research Exchange Area,
Seminar Room 1
Join us for light refreshments (coffee/tea and biscuits) before the Forum at 2.15 p.m.
This event is free and open to public: go.warwick.ac.uk/draw