Making decisions under uncertainty: The Prudent Judgement Approach

Abstract

AbstractThis article offers an alternative conceptualisation of prudence as encompassing four normative components: reflective reasoning, experience, long-term well-being, and moderation. Prudence involves a pattern of reflective reasoning informed by experience in the pursuit of long-term well-being through moderate judgements and actions. This conceptualisation allows distilling a set of prescriptions for guiding deliberation and choice under uncertainty, which I name the Prudent Judgement Approach. An analysis of John F. Kennedy's deliberations at the start of the Cuban Missile Crisis uncovers evidence of prudent judgement and demonstrates the practical feasibility and value of this approach. Although the numerous cognitive and procedural sources of errors in decision-making under uncertainty are by now well understood, there are few prescriptive approaches for guiding the process of formulating judgements and making choices. This article shows how prudence can help improve the quality of deliberative processes and policy choices.