CDR Seminar: Gideon Keren - "On decisions by coin and the limits of rational choice"

Abstract

People fail to perceive the role of randomness in their lives and prefer to “explain” their experiences with a causal narrative. This is probably the reason why in situations of indeterminacy, where people agree that there are no decisive arguments favouring one alternative to another, they are still strongly opposed to resolve the dilemma by a coin toss. The robustness of this reluctance will be demonstrated in several experiments, where factors such as importance of consequences, similarity of alternatives, conflicts of opinion, outcome certainty, type of randomizer, and fairness considerations are systematically explored.

Coin toss is perceived as particularly aversive in cases of life and death, even when participants agree that protagonists threatened with death should have equal chance of being saved. Using randomizers seems to conflict with traditional ideas about reason-based rationality as well as with personal responsibility of the decision maker. Moreover, a concrete randomizer like a coin appears more repulsive than an abstract principle of using a random device. Repercussions for rational choice theory and the implications to real life of this deeply rooted aversion to the use of randomizers will be briefly discussed.

About the speaker

Gideon Keren obtained his BA degree in Economics and MA in Business Administration from the Hebrew University of Jerusalem, and a Phd in Psychology from the University of Illinois in Champaign-Urbana. His research is in the field of Decision making with special emphasis on probabilistic reasoning, framing, inter-termporal choice, and applications of game theory to the behavioral sciences. In collaboration with George Wu from the University of Chicago he has edited The Blackwell Handbook of Judgment and Decision Making (2016, 2 volumes).