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This paper reviews the state of the art of research on individual decision-making in high-stakes, low-probability settings. A central theme of the discussion is that optimally resolving high-stakes decisions poses a formidable challenge not only to naïve decision makers, but also to users of more sophisticated tools such as decision analysis.. Such problems are difficult to resolve because precise information about probabilities is not available, and the dynamics of the decision are complex. When faced with such problems, naïve decision-makers fall prey to a wide range of potentially harmful biases, such as not recognizing a high-stakes problem, ignoring the information about probabilities that does exist, and responding to complexity by accepting the status quo. We offer an agenda for future research focusing on how the process and outcomes of high-stakes decision making might be improved.
“The final publication is available at Springer via http://dx.doi.org/10.1023/A:1020287225409”.
high-stakes decisions, risky decision making, decision heuristics, decision biases, decision making under certainty
Kunreuther, H., Meyer, R., Zeckhauser, R., Slovic, P., Schwartz, B., Schade, C., Luce, M., Lippman, S., Krantz, D., Kahn, B., & Hogarth, R. (2002). High Stakes Decision Making: Normative, Descriptive and Prescriptive Considerations. Marketing Letters, 13 (3), 259-268. http://dx.doi.org/10.1023/A:1020287225409
Date Posted: 27 November 2017
This document has been peer reviewed.