Radical Uncertainty

The legal style of reasoning, essentially abductive, involves a search for the ‘best explanation’ – a persuasive narrative account of events relevant to the case.

And the third company, whose directors had spent half an hour watching ‘Quality is Free’, oblivious to its irrelevance to the water industry, had failed to recognise the difference between motivational proselytisation to employees – for which there is a role – and boardroom debate.

The second company, embarking on the acquisition of a German firm, had confused aspirations with strategy. That confusion naturally leads to the complaint that formulating strategy is easy: implementation is the problem.

The first company, sitting beneath the bogus ancestral portraits, had mistaken quantification for understanding, and confused forecasting and planning, in a manner which provided little help but encouraged the proliferation of invented numbers.

And to observe that having prior opinions about everything is one of the principal characteristics distinguishing the bad decision-maker.

Artificial intelligence offers the prospect of ever faster ways to solve complex puzzles, but it will not resolve mysteries.

As Keynes observed, the spirit of enterprise dies when mathematical expectation takes over.

It is that many of the characteristics of human reasoning which behavioural economics describes as biases are in fact adaptive – beneficial to success – in the large real worlds in which people live, even if they are sometimes misleading in the small worlds created for the purposes of economic modelling and experimental psychology. It is an account

With experienced decision-makers, the focus is on the way they assess the situation and judge it familiar, not on comparing options. Courses of action can be quickly evaluated by mentioning how they will be carried out, not by formal analysis and comparison. Decision-makers usually look for the first workable option they can find, not the best opti