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Multiple steps to the precipice: Risk aversion and worry in sequential decision-making
Peter Dayan

When outcomes are not completely certain, we have to grapple with risk. Different individuals have characteristically different attitudes to risk - something that has been extensively investigated in psychology and psychiatry, albeit largely using venerable measures that lack certain axiomatically-desirable properties. Here we consider a modern risk measure for modeling human and animal decision-making called conditional value at risk (CVaR) which is particularly apposite because of its preferential focus on worst-case outcomes. We discuss theoretical characteristics of CVaR in single and multi-step decision-making problems, relating our findings to avoidance and worry. This is joint work with Chris Gagne.

Author Information

Peter Dayan (MPI for Biological Cybernetics)

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