Most decisions have consequences that are uncertain and materialize in the future. Perception of uncertainty may be biased when it regards the future. Indeed, recent research led by Emmanuel Kemel, Professor of Economics and Decision Sciences at HEC Paris and CNRS researcher, and Corina Paraschiv, Professor at LIRAES, has found that people are more likely to take risks if the consequences of their decision aren’t felt immediately.
By Emmanuel Kemel
How much information one needs to provide to decision makers to respect transparency while keeping its competitive edge? In a new study using a mathematical probabilistic model, HEC Paris professors in Economics and Decision Sciences Frederic Koessler, Marie Laclau and Tristan Tomala, find the optimal equilibrium of information to reveal for companies in a situation where there are competitors.
By Tristan Tomala , Marie Laclau , Frédéric Koessler
When trying to figure out the outcome of a given situation, or the fallout of a sudden event, is it better to reason by analogies and resort to past experience or to think ahead and apply probabilistic reasoning? Researchers present a new mathematical model on making decisions in uncertain circumstances, which takes into account both modes of reasoning.
By Stefania Minardi , Itzhak Gilboa
Although popular wisdom assumes that virality is a random and thus unmanageable process, research by Haris Krijestorac (HEC Paris), Rajiv Garg (Goizueta Business School, Emory University) and Vijay Mahajan (University of Texas) finds several ways for marketers and content creators to design and promote their digital media in ways that significantly increase the likelihood of these media achieving virality and sustaining it. Interview with Haris Krijestorac, Assistant Professor of Information Systems.
By Haris Krijestorac
The COVID-19 pandemic has fostered the sharing of conflicting and unsubstantiated claims by public figures. Early November, a deeply divided nation elected Joe Biden as the President of the United States. A recent research published by professors Anne-Sophie Chaxel of HEC Paris and Sandra Laporte of Toulouse School of Management reveals that individuals believe in unsubstantiated claims when shared by favorite public figures, explaining polarization in opinions. In this article, Anne-Sophie Chaxel explains how rational people come to strongly believe in unchecked claims.
By Anne-Sophie Chaxel
When will be the next financial crisis? Who is going to win the next US presidential elections? How do we create beliefs about such events? By understanding how probabilistic beliefs form, economic theorists can now explain and predict phenomena that depend on rational beliefs. Latest research by Rossella Argenziano and Itzhak Gilboa equips economic modeling with a theory and a set of tools of belief formation, based on statistics and psychology. Some of the immediate applications are the equilibrium selection in coordination games.
By Itzhak Gilboa
We, individuals and society, are faced today with many important decisions involving radical degrees of uncertainty. To better communicate on the current state of knowledge about uncertainty, and incorporate it into decisions, Brian Hill, CNRS and HEC Paris Professor of Economics and Decision Sciences, initiated the "Uncertainty Across Disciplines" project, interviewing 10 leading experts on the topic of uncertainty.
By Brian Hill , Itzhak Gilboa
The health crisis caused by COVID-19 has triggered an economic one. We observe a significant portion of the population fearing shortage of primary consumption goods and marked stockpiling behavior. Because such behavior increases the risk of shortage, several stores have decided to ration some goods, and governments have had to make public announcements to reassure consumers that there would be no shortage. Avoiding consumer stockpiling is hence one of the key aspects of the management of this crisis. But is it rational to stockpile in times of crisis? We review and discuss the rational and irrational aspects of such behavior.
Severe uncertainty, deep uncertainty, radical uncertainty, ambiguity… different actors in a range of fields – decision scientists, risk analysts, climate scientists, central bankers – use a variety of phrases to talk of some extreme, important yet too often ignored form of uncertainty. But what is it? And how should we deal with this particular species of uncertainty: how should we characterise it, communicate it, and decide in the face of it? In this interview, CNRS Research Director and HEC Paris Research Professor Brian Hill explains the concept and unveils applicable tools based on theoretical models for guiding decisions in situations of severe uncertainty.
By Brian Hill
Mental distortions known as cognitive biases often shifts our judgement away from rational prescriptions. While such biases are normal – it's just the way our brains are wired – they can lead to poor choices, sometimes with disastrous consequences. But new evidence shows how simple training can help us identify these biases and tremendously improve decision making.
By Anne Laure Sellier
