Craig Fox, Ph.D.
Harold Williams Chair and Professor of Management
Anderson School of Management
University of California, Los Angeles
Two Dimensions of Subjective Uncertainty
In my talk I will argue that people maintain dual intuitions about the nature of uncertainty, and these intuitions can have a critical impact on a wide range of judgments and choices. We attribute the first form of uncertainty to deficiencies in our knowledge, information, and/or mental model of relevant events (knowable or “epistemic” uncertainty); we attribute the second form of uncertainty to causal systems whose behavior is inherently unpredictable (random or “aleatory” uncertainty). In the first part of my talk I’ll show that people intuitively distinguish uncertainty along these two dimensions: it is reflected in their use of natural language, can be measured reliably using a simple rating scale that loads on two independent factors, and is associated with attributions of skill versus luck. In the second part of my talk I’ll show implications of the epistemic-aleatory distinction for understanding judgmental overconfidence, ambiguity aversion, consumer financial decision making, and other empirical phenomena.
About the Speaker
Craig Fox is Harold Williams Professor of Management, and also Professor of Psychology and Medicine at UCLA. He is chair and co-founder of the Behavioral Decision Making Area at the UCLA Anderson School of Management. Dr. Fox is founding co-editor of the journal Behavioral Science & Policy and co-President of the Behavioral Science & Policy Association. He is former President of the Society for Judgment and Decision Making and is a Fellow of the American Psychological Society. Fox earned his B.A. in Psychology and Economics from the University of California at Berkeley, where he was mentored by Daniel Kahneman, and he earned his M.A. and Ph.D. in Experimental Psychology from Stanford University, where he was mentored by Amos Tversky.