Uncertainties associated with decision making regarding tornado warnings can lead to false warnings and missed events. A false warning is a situation when the public is warned about a tornado and one does not actually occur. A missed event is a catastrophic situation where a tornado touchdown occurs without an advance warning. This paper mainly focuses on how false warnings and missed events influence the decision-making process of households and forecasters. The underlying factors for false warnings and missed events are analyzed in detail. Forecasters' decision making about tornado warnings and the public's decision to respond to a warning are analyzed using a probabilistic decision-tree approach. A logical basis for decision making is developed, and a fundamental inequality for decisions regarding tornado warnings is identified. This logical basis is applicable to other disasters as well. False warning and missed event probabilities are analyzed using the data from the Canadian Prairies. The overall analysis is applicable to improve the tornado-warning performance in the Canadian Prairies. (C) 2015 American Society of Civil Engineers.