Decisions With Uncertainty: The Glass Half Full

Each of us makes important decisions involving uncertainty in domains in which we are not experts, such as retirement planning, medical treatment, and precautions against severe weather. Often, reliable information about uncertainty is available to us, although how effectively we incorporate it into the decision process remains in question. Previous research suggests that people are error-prone when reasoning with probability. However, recent research in weather-related decision making is more encouraging. Unlike earlier work that compares people’s decisions with a rational standard, this research compares decisions made by people with and without uncertainty information. The results suggest that including specific numeric uncertainty estimates in weather forecasts increases trust and gives people a better idea of what to expect in terms of both the range of possible outcomes and the amount of uncertainty in the particular situation, all of which benefit precautionary decisions. However, the advantage for uncertainty estimates depends critically on how they are expressed. It is crucial that the expression is compatible with both the decision task and cognitive processes of the user.