 Trying to predict the future, it's a constant human endeavor. I mean, it's a very integral part of being a human being. You want to control our environment, you want to look into the future, predict it, plan it, and try and twist it in the direction that's consistent with our desires and goals and so on. However, we often go too far in that direction, and we often fall into this trap of illusion of control. That is, we end up assuming we control things and we actually don't. How do people actually make decisions in real life? Now, what goes on in their minds when they're dealing with risk and uncertainty? How do people perceive risk? How do they try and measure it? So it's not about how should people do things, it's about how people actually do things. My name is Anil Gaba. I'm a professor of decision sciences at MCA. So what's happening is that different psychological biases exist at various levels of an organization which creates paradoxical tensions that must be managed. So for me personally, the only way forward is not to be ideological about it, like a church. Now, why do I go? Because it is a nice and an effective platform for dissemination of the research and at the same time to learn. But firms spend billions of dollars annually on R&D effort and yet the potential returns from those investments remain highly uncertain and very wide ranging. This underlines one of the key challenges in innovation and R&D, which is managing risk. Now, the perception of risk and the consequent risk-taking is distorted by different psychological biases. Clear on the definition of risk versus uncertainty. If you toss a coin, will it be heads or will it be tails? The probability of heads is 0.5. So what we call it, this is risk because we can estimate probabilities. Now think about, will there be another bubble in the financial markets? The answer is yes, but can we estimate the probabilities? When will it happen in what form? That's uncertainty. So in real life, what you face more often is uncertainty. Think of a Swiss-German investment banker named Klaus. He lives on the Upper East Side in Manhattan, complete control-free, hit surprises, likes to have everything planned in his life. So one morning, family is asleep, he's walking on the beach, son is beaming down on him, he gets worried, he's going to get skin cancer. So sits under a tree, from his backpack, takes out some sunscreen lotion and starts putting on his body. While he's doing that, a coconut drops on his head and he dies. The point of this story is, if you think about it, very broadly speaking, there are two types of uncertainty. One is what we call sub-bay uncertainty. Uncertainty which can be quantified, which can be measured. So this other type of uncertainty is what we call coconut uncertainty, which is difficult if not impossible to measure. Sometimes you have risk, but more often than not, it's uncertainty where it's impossible to come up with distributions or probabilities. So that's the real challenge in the real life. So in other words, can we come up with some useful, parsimonious, frugal rules or heuristics that people can actually use in real life? People like medical doctors, public policy makers, individuals to make better decisions, to get a better handle on risk and uncertainty? I'm a scientist, but when you start talking to the media, they want a one-line, they want a headline. Quite often they don't even want the mean out, so they want the worst case scenario. Millions could die, or maybe only a couple. People look for artificial resolution of the uncertainty when it can't really be done. Another implication is basically the paradox of control, that business managers, individuals, medical doctors, public policy makers should realize that there's a flipside to trying to control, that if you actually don't try to control what you can't control, you might encounter more beneficial outcomes. It doesn't mean you don't try to predict the future, you still try, but keeping in mind that there's serious limits to what you can predict.