# HEVAL5150 – Decision making under risk and uncertainty

Choose semester

## Course content

Health officials often have to make decisions and give advice on matters that involve risk and uncertainty. How much uncertainty is acceptable when implementing a screening program for mammography? How should the risk of unhealthy habits be communicated to the public? Should we make a decision right now or would it be better to wait and collect more information? Are we subject to psychological mechanisms that create systematically wrong decisions? Would we be better off trying to follow some simple decision rules instead of trying to calculate and select the alternative perceived to be the best? The course provides a general introduction to decision-making with special focus on problems related to health.

## Learning outcome

1. #### Knowledge

1. Know  the difference between risk, uncertainty
2. Be able to discuss different concepts of probability
3. Difference between expected value and expected utility
4. Be able to explain St. Petersburg and Allais’ paradox
5. Knowledge of mechanisms that distort probability estimation
6. The use of “nudging” to change behaviour
7. Different ways of communicating risk and uncertainty
8. The concept of value of information
9. Different decision rules and types of discounting
10. Bayes` rule for forming correct beliefs
11. Advantages and disadvantages of different ways of communicating uncertainty in health
2. #### Skills

1. Be able to calculate expected value and net present value
3. Perform calculations using Bayes theorem
4. Present information about risk in a jargon-free manner
5. Ability to discuss strength and weaknesses of using p-values
3. #### General competence

1. Increased awareness of weaknesses in human decisions-making

Keywords

Rational choice, Expected value, St. Petersburg paradox, Expected Utility, Allais paradox, game theory, Bayesian updating, risk, uncertainty, risk communication, option value, exponential discounting, Hyperbolic discounting, Bounded rationality, heuristics and biases, screening, type I and II error, p-value, heuristics.

Students who are admitted to study programmes at UiO must each semester register which courses and exams they wish to sign up for in Studentweb.

## Examination

Term paper.

### Use of sources and citation

You should familiarize yourself with the rules that apply to the use of sources and citations. If you violate the rules, you may be suspected of cheating/attempted cheating.

### Language of examination

For students at Eu-HEM: English

For students at HEPAM: The problem set will be given in English. Answers can be given in Norwegian, Swedish, Danish or in English.

### Resit an examination

For HEPMA students:

For Eu-HEM students:

An EU-hem student cannot present her or himself for the examination in a course more than two times. There will be held re-sits for EU-hem students who have failed an exam or who have legitimate absence (usually illness) in January and August. If you are entitled to a re-sit you must contact the student advisor via email no longer than one week after the result of the exam has been published.

### Withdrawal from an examination

It is possible to take the exam up to 3 times. If you withdraw from the exam after the deadline or during the exam, this will be counted as an examination attempt.

### Special examination arrangements

Application form, deadline and requirements for special examination arrangements.

## Evaluation

The course is subject to continuous evaluation. At regular intervals we also ask students to participate in a more comprehensive evaluation.

5

Master

### Teaching

The course will not be offered in autumn 2019.

English

## Contact

Institute of Health and Society