Decision-making under uncertainty has tended to proceed on the assumption that there is a “right” and a “wrong” way of making decisions. There is a large literature on the assumptions behind the view that individuals or organisations should maximise a measure of expected “utility” but all approaches along these lines require the assumption that there are subjective probabilities attached to every conceivable state of the world. In a world of radical uncertainty, however, no such probabilities exist (Kay & King, Reference Kay and King2020). How then should individuals make decisions in such a world?
There are two immediate implications of radical uncertainty. First, optimising behaviour cannot be defined. Second, there is no single rule of thumb that can replace optimising behaviour: Individuals must learn to cope with circumstances as they arise. What modes of thought are useful in confronting the situation of this kind? Johnson et al. recognise that when quantitative assessments of uncertainty are impossible, individuals try to understand radical uncertainty in terms of narratives. This is how people communicate with each other. But they go much further in analysing how narratives are constructed and communicated to others. Their Conviction Narrative Theory (CNT) argues that “narratives arise from the interplay between individual cognition and the social environment, with reasoners adopting a narrative that feels ‘right’ to explain the available data; using that narrative to imagine plausible futures; and affectively evaluating those imagined futures to make a choice.” This is an interesting and plausible way to think about how individuals make decisions when quantitative assessments are not open to them. As the authors comment, “we use narratives to make sense of the past, imagine the future, commit to action, and share these judgments and choices with others.”
Narratives are used to evaluate “imagined futures.” In turn, decisions are made through the adoption of heuristics which are simple rules of thumb that precisely, because they are simple, are likely to be robust. All of this is compelling. The paper provides a rich framework within which to think about what constitutes rational decision-making in a world of radical uncertainty. But the question I would pose is the following. Although the authors start and continue with revealing examples of decisions, the conceptual apparatus of CNT is not used to provide answers except in a general and abstract form. Is it possible to do so, or are we driven to the proposition that only an analysis of specific circumstances can explain why a decision was taken? Is there any general result that we can discuss independent of the particular circumstances of that decision? The intellectual attractions of a general theory are clear. But is this an illusion in our present state of knowledge? More fundamentally, in a world of radical uncertainty can there be a general theory at all?
The authors are clearly conscious of this issue. They argue, correctly in my view, that they are tackling a “grand” problem. But the question of how far we can get in constructing the general theory remains open. Nevertheless, as the authors conclude, “the preoccupation of much decision-making research with optimality – whether in assumption or subversion – might profitably yield some ground to the more basic question of how, under radical uncertainty and fuzzy evaluation, we gain conviction to act at all.”
Social scientists across a variety of disciplines are needed to make progress in this important area.
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Decision-making under uncertainty has tended to proceed on the assumption that there is a “right” and a “wrong” way of making decisions. There is a large literature on the assumptions behind the view that individuals or organisations should maximise a measure of expected “utility” but all approaches along these lines require the assumption that there are subjective probabilities attached to every conceivable state of the world. In a world of radical uncertainty, however, no such probabilities exist (Kay & King, Reference Kay and King2020). How then should individuals make decisions in such a world?
There are two immediate implications of radical uncertainty. First, optimising behaviour cannot be defined. Second, there is no single rule of thumb that can replace optimising behaviour: Individuals must learn to cope with circumstances as they arise. What modes of thought are useful in confronting the situation of this kind? Johnson et al. recognise that when quantitative assessments of uncertainty are impossible, individuals try to understand radical uncertainty in terms of narratives. This is how people communicate with each other. But they go much further in analysing how narratives are constructed and communicated to others. Their Conviction Narrative Theory (CNT) argues that “narratives arise from the interplay between individual cognition and the social environment, with reasoners adopting a narrative that feels ‘right’ to explain the available data; using that narrative to imagine plausible futures; and affectively evaluating those imagined futures to make a choice.” This is an interesting and plausible way to think about how individuals make decisions when quantitative assessments are not open to them. As the authors comment, “we use narratives to make sense of the past, imagine the future, commit to action, and share these judgments and choices with others.”
Narratives are used to evaluate “imagined futures.” In turn, decisions are made through the adoption of heuristics which are simple rules of thumb that precisely, because they are simple, are likely to be robust. All of this is compelling. The paper provides a rich framework within which to think about what constitutes rational decision-making in a world of radical uncertainty. But the question I would pose is the following. Although the authors start and continue with revealing examples of decisions, the conceptual apparatus of CNT is not used to provide answers except in a general and abstract form. Is it possible to do so, or are we driven to the proposition that only an analysis of specific circumstances can explain why a decision was taken? Is there any general result that we can discuss independent of the particular circumstances of that decision? The intellectual attractions of a general theory are clear. But is this an illusion in our present state of knowledge? More fundamentally, in a world of radical uncertainty can there be a general theory at all?
The authors are clearly conscious of this issue. They argue, correctly in my view, that they are tackling a “grand” problem. But the question of how far we can get in constructing the general theory remains open. Nevertheless, as the authors conclude, “the preoccupation of much decision-making research with optimality – whether in assumption or subversion – might profitably yield some ground to the more basic question of how, under radical uncertainty and fuzzy evaluation, we gain conviction to act at all.”
Social scientists across a variety of disciplines are needed to make progress in this important area.
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This research received no specific grant from any funding agency, commercial or not-for-profit sectors.
Competing interest
None.