Taming Uncertainty

Oct 27, 2019

You’ve heard the old Benjamin Franklin quote that nothing can be said to be certain except death and taxes.

But there is actually quite a lot that’s uncertain about both death and taxes. And about everything else.

Uncertainty is the human condition, according to a new book By Ralph Hertwig, Timothy J. Pleskac and Thorsten Pachur. The book is called Taming Uncertainty and it looks at the ways that we humans manage uncertainty and make choices even in the face of unpredictable outcomes.

There are few different categories of uncertainty, Timothy Pleskac (pronounced “pless-scotch”) told Living Lab Radio.

  • Strategic uncertainty. The type of uncertainty when you don’t know how people are going to act.
  • Environmental uncertainty. The pure uncertainty about how events are going to happen in the world, from the weather to earthquakes.
  • Epistemic uncertainty. Your lack of knowledge about a particular domain. Which is farther north, New York or Rome?

One strategy that people use is a “heuristic,” or mental shortcut, which doesn't always give us the right answer, but often gives us a good answer. It’s a rule of thumb.

“One of the ones we talk about in the book is a risk-reward heuristic,” Pleskac said.

We also form our own beliefs after exploring our world or after consulting friends, Pleskac said.

“We want to put out the argument that the mind has been quite successful and has a nice repertoire of tools,” he said.