Social Science Bites

Quite often the ideas of ‘risk’ and of ‘uncertainty’ get bandied about interchangeably, but there’s a world of difference between them and it matters greatly when that distinction gets lost. That’s a key message from psychologist Gerd Gigerenzer, who has created an impressive case for both understanding the distinction and then acting appropriately based on the distinction. “A situation with risk,” he tells interviewer David Edmonds in this Social Science Bites podcast, “is one where you basically know everything. More precisely, you know everything that can happen in the future … you know the consequences and you know the probabilities.” It is, as Bayesian decision theorist Jimmie Savage called it, “a small world.” As an example, Gigerenzer takes us a spin on a roulette wheel – you may lose your money on a low-probability bet, but all the possible options were known in advance. Uncertainty, on the other hand, means that all future possible events aren’t known, nor are their probabilities or their consequence