Workshop on Decision Making under Severe Uncertainty

June 19 and 20 (Friday and Saturday)

Room 2.06, Lakatos building, London School of Economics Campus map

Schedule:

Friday, June 19

14:00 -- Welcome

14:10 -- 15:20  Simone Cerreia Vioglio  (Università Bocconi) 

15:20 -- 16:30  Katie Steele  (LSE Philosophy)

16:40 -- 17:10  coffee

17:10 -- 18:20  Brian Hill   (HEC Paris)

18:20 -- 19:30  Philippe Mongin  (HEC Paris) 

19:30 -- depart for dinner (off site)

Saturday, June 20

10:30 -- 11:40  Oliver Walker  (LSE Grantham Institute) 

11:40 -- 12:50  Edi Karni (Warwick Business School; Johns Hopkins)  

12:50 -- 13:50 lunch (on site)

13:50 -- 15:00  Ken Binmore  (Bristol; UCL) 

 

Titles and abstracts:

Simone Cerreia Vioglio   (Università Bocconi) 

"A note on comparative ambiguity aversion and justifiability" (Authors: P. Battigalli, S. Cerreia-Vioglio, F. Maccheroni, M. Marinacci)

ABSTRACT: An action is justifiable if it is a best reply to some belief. We show that higher ambiguity aversion expands the set of justifiable actions.

Katie Steele  (LSE Philosophy)

"Can ‘good enough’ be better than ‘best’?: Satisficing decisions under severe uncertainty"

ABSTRACT: The satisficing approach to decision making, i.e., focusing on making a good enough rather than an optimal choice, is generally considered a mere heuristic for imperfect agents. This paper investigates whether satisficing may nonetheless play a more principled role in contexts of severe uncertainty, using example decisions about climate change adaptation to illustrate. Some form of satisficing may help to discriminate options that are otherwise incomparable due to severe uncertainty about their possible consequences. But what form of satisficing is appropriate? The possibilities are various: We might require a satisfactory level of expected utility, or epistemic confidence underlying a choice, or some aspect of the world that may be more or less abstract, such as aggregate wellbeing or crop yield. Here I focus on satisficing rules that are coupled with the idea of ‘tolerance or robustness to uncertainty’: I outline the common form of these rules, and, where they part ways, assess their differing rationales.

Philippe Mongin  (HEC Paris) 

"Is Cost-Benefit Analysis Applicable to Nuclear Safety?"

Brian Hill   (HEC Paris)

"Decision and Climate Change Assessments" (joint work with Casey Helgeson and Richard Bradley)

ABSTRACT. The Intergovernmental Panel on Climate Change (IPCC) has adopted official guidelines for communicating uncertainties attached to the scientific findings that appear in their assessment reports. One novel feature of their approach is the use of ‘confidence’, a second-order qualification that indicates the level of scientific understanding behind a claim. So far, it is unclear how findings communicated in this format can be used to inform rational decisions. We explore how the IPCC guidelines fit together with a new, confidence-based normative model of decision making (Hill, 2013, ‘Confidence and Decision’, Games and Economic Behavior).

Oliver Walker  (LSE Grantham Institute) 

"Modelling decision making under conscious unawareness"

Edi Karni (Warwick Business School; Johns Hopkins)  

"Awareness of Unawareness: A Theory of Decision Making in the Face of Ignorance" (joint work with Marie-Louise Vierø).

ABSTRACT: In the wake of growing awareness, decision makers anticipate that they might acquire knowledge that, in their current state of ignorance, is unimaginable. Supposedly, this anticipation manifests itself in the decision makers' choice behavior. In this paper we model the anticipation of growing awareness, lay choice-based axiomatic foundations to subjective expected utility representation of beliefs about likelihood of discovering unknown consequences, and assign utility to consequences that are not only unimaginable but may also be nonexistent. In so doing, we maintain the flavor of reverse Bayesianism of Karni and Vierø (2013, 2014).

Ken Binmore  (Bristol; UCL) 

"Rational Decisions in Large Worlds"

ABSTRACT: Savage restricted the application of Bayesian decision theory to what he called a small world, saying that it would be "preposterous" and "utterly ridiculous" to apply his theory in a large world. This paper suggests that we should therefore not be surprised if Bayesian decision theory fails to predict in experiments whose framing does not meet the small-world requirement, and that new theories are required for large-world applications. In defence of the experimental observation, two small-world experiments on the Ellsberg Paradox are briefly reviewed in which Bayesian decision theory predicts the data as well as any alternative considered. In support of the second observation, a minimal extension of Bayesian decision theory is proposed that is intended for use immediately after a surprise converts what was thought to be a small world into a large world. 

 

Accommodations for speakers:

CLUB QUARTERS, LINCOLN'S INN FIELDS

61 Lincoln’s Inn Fields, London WC2A 3JW

+44 (0)20 7404 6640, 

Website 

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