State of the Art
How to Improve Decision Making
This in-depth dossier features the latest and cutting-edge research findings on decision making from HEC Paris' professors. We hope that the tools presented will help you think your decision making from new angles and to elaborate appropriate strategies in various situations, especially during these times of uncertainty.
A New Theory in Economics Helps Predict Future Events
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.
A New Definition of Comparative Ambiguity Attitude
HEC Paris Ph.D. student Fan Wang unveiled a new definition of ambiguity attitude during the latest D-TEA conference on decision making, organized by HEC Paris Professor Itzhak Gilboa. This was acknowledged and congratulated by decision-theory expert Peter Wakker. In this interview, Mr Wang explains what does he brings both to the field of decision sciences and to practice.
The Uncertainty Across Disciplines Project
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.
3 Objectives to Create Intelligence in the Face of Uncertainty
Uncertainty is an invisible trap, set to blind our capacity to avoid nonsense and create actual intelligence. Why invisible? Because uncertainty is powered by what we do not know, which is particularly difficult to become aware of. Anne-Sophie Chaxel, HEC Paris Associate Professor of Marketing and expert in cognitive biases, gives three objectives to keep in mind to embrace uncertainty, along with practice tool boxes to create intelligence.
Is It Rational to Stockpile in Times of Crisis?
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.
How to Deal with Severe Uncertainty?
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.
How Do Governments And Individuals Make Decisions In A Time Of Crisis? The Case Of The Coronavirus
Why different countries have made very different decisions to fight the coronavirus? What are the potential consequences of such crisis on the psychology of the population? In this interview, Anne-Sophie Chaxel, HEC Paris Associate Professor of Marketing specialized in consumer behavior and decision-making, explains the different approaches of governments toward their responsibility, and the biases behind non-optimal behaviors and decisions. She also shares her recommendation regarding decision-making processes.
Yes, You Can Be Trained To Make Better Decisions
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.
Thinking About Time Flying? It Can Affect Your Decision Making
When the clock in our minds ticks loudly, it changes not only our perspective of the time remaining in our lives, but also how we process information. A trio of researchers investigated how thinking about the concept of time can affect our decision making. This unique piece of research could explain biases in hiring, voting, and many other contexts.