Analyzing Decisions Under Uncertainty: Simple Tools of the Heathens

A major obstacle for engaging with standard decision analysis is that one must reduce uncertainty to risk. This chapter contributes to situations where uncertainty cannot be meaningfully reduced to risk. I synthesize findings and perspectives of behavioural scientists who have ventured outside the lab and into the wild. Psychologist Gerd Gigerenzer and colleagues’ fast-and-frugal-heuristics program provides transparent and accurate, simple quantitative rules for laypeople and experts; and the radical-uncertainty thesis of economists Mervyn King and John Kay shows that important organizations and groups can make truly rational decisions by employing rich, coherent qualitative narratives. I speculate on the way forward for these ideas in decision analysis, and more generally connect to “soft” and “behavioral” operations research.