The newsletters in this Substack concern decisions under risk and uncertainty, the domain most relevant to the gambling metaphor described in the previous post. But what are risk and uncertainty? The answers might seem obvious since the terms are used in everyday language, but in behavioral decision theory each term has specialized usage. This essay distinguishes risk and uncertainty from each other and from some other types of decisions they are commonly contrasted against.
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What Is—and Isn't—*Risk* and *Uncertainty*?
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The newsletters in this Substack concern decisions under risk and uncertainty, the domain most relevant to the gambling metaphor described in the previous post. But what are risk and uncertainty? The answers might seem obvious since the terms are used in everyday language, but in behavioral decision theory each term has specialized usage. This essay distinguishes risk and uncertainty from each other and from some other types of decisions they are commonly contrasted against.