The consequences of most actions are stochastic, that is, they entail some risk. The problem of how risk relates to decision making has been faced by economists for centuries, by psychologists for a long time and by biologists researching non-human behaviour for a couple of decades. Their findings and theoretical frameworks show important similarities as well as differences. Economists and psychologists have given strong emphasis to risk aversion, its possible rationality and its psychological causes. In contrast, evolutionary biologists faced risky choice from a theoretical standpoint that assumes evolutionary rationality and state-dependency, leading to predictions of either risk-seeking or risk-avoidance depending on the state and payoff representation of the subject. Reality, however, is unique, and empirical work is forcing these approaches to converge. I shall outline classical economic views (Bernoulli), Prospect theory (Kahneman); Risk Sensitivity Theory (Caraco, Houston & McNamara) and Scalar Utility Theory (my own pet account) and review some of the relevant empirical evidence.
Kacelnik A & Bateson M (1997) Risk-sensitivity: cross-roads for theories of decision making. Trends in Cognitive Sciences 1, 304-309.
Kacelnik A & Brito e Abreu F. (1998) Risky Choice and Weberıs Law. J. Theoretical Biology 194, 289-298
Website of Alex Kacelnik's ecology research group in Oxford.