CeDEx Brown Bag Seminar - Adrian Brown

Title: Simon Says: Is rule following just playing it safe?

Abstract: Rules shape a wide range of everyday behaviours, from wearing safety equipment to following a recipe or adhering to a dress code. By specifying what should or should not be done, rules implicitly communicate information about what is considered ‘safe’. More broadly, rules often convey information about the payoff associated with different actions and may provide certainty regarding these payoffs. Conversely, deviating from a rule can introduce variance into outcomes, as rule-breaking may probabilistically yield a better or worse payoff than the certain outcome of following the rule. Through this lens, risk preferences become a central factor in decisions about whether to follow or violate a rule, since individuals weigh the certain payoff from compliance against the uncertain payoff from breaking the rule. This work examines how the presence of a rule influences individuals’ risk-taking decisions. It seeks to determine whether a rule acts as a signal of what is ‘safe’, so that once the underlying risk is known, the rule becomes irrelevant, or whether the rule itself alters decision-making beyond the information it conveys. Within the framework of CRISP, I am providing a generic explanation of I.