CRED Graduate Student speaks to Global Catastrophic Risk Institute

On November 26, 2012, CRED doctoral student Katherine Thompson spoke to the Global Catastrophic Risk Institute. Her talk was entitled “What We Think About When We Think About Probability: How Our Experience Affects the Way We Perceive the Risk of Rare Events.” The talk abstract appears below and a full summary can be found at this link: http://gcrinstitute.org/katherine-thompson-gives-gcri-public-lecture-on-psychology-of-uncertainty/

Abstract

Psychology research has identified numerous ways that people misinterpret, misuse, distort, or neglect probabilities when making decisions under uncertainty. Prospect Theory predicts that very rare events will be over-weighted: that very low probabilities will be treated as higher than they actually are. This effect would seem to predict that people who hear about the probabilities of extremely low-probability, catastrophic events should overreact, over-prepare, and evacuate early. Although field reports do support some of these predictions—see, e.g., the evacuation “halo” effect—on the whole it seems that the opposite bias is true: that people under-prepare for catastrophic hazards, and tend to evacuate late if at all. But the predictions of Prospect Theory hold true only when probabilities are described, or given explicitly; when people learn about probabilities through their own experience, they tend to under-weight rare events. The last decade has seen much attention to this “Description-Experience (DE) Gap” effect in the laboratory, but only recently have researchers begun to test the DE Gap in more real-world-like situations. My current research is working to push the external validity of the DE Gap farther into the real world, and to better understand how people make decisions in complex situations in which a mix of description and experience are available to draw upon.