living in uncertainty HOPE AND HUMAN FLOURISHING
Alvin Tan
H
ere’s a question. Would you choose a lottery that gives you a 50% chance of winning $1000, or a 100% chance of winning $450?
If you chose the latter, you’re in good company—many people are disincentivised by the uncertainty of the first option, even though theoretically you would receive more from it on average.1 This type of behaviour is known as ‘risk aversion’, and in a season of seemingly incessant uncertainty, it may be particularly illuminative to understand how we process—and perhaps thrive in—such uncertain scenarios. Formally, uncertainty arises in situations in which information about action outcomes is limited or incalculable.2 In the laboratory, access to information is controllable by the experimenter, who is able to directly manipulate the relationships between actions and outcomes. But few real-life situations follow such a paradigm—the nature of the environment we live in precludes deterministic prediction of most events. Human brains thus need to account for this unpredictability in their decision-making processes.
1 Kahneman, D. & A. Tversky. ‘Choices, values, and frames’, American Psychologist, 39, no. 4 (1984). 341–350. 2 Huettel, S. A., A. W. Song, & G. McCarthy. ‘Decision under uncertainty: Probabilistic context influences activation of prefrontal and parietal cortices’, Journal of Neuroscience, 25 (2005). 3304–3311.
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