The Role of Analogies in Crisis Decision Making

Author(s):  
David Patrick Houghton

Analogical reasoning is a mode of thinking in which a current situation, person, or event is compared with something encountered in the past that appears “similar” to the analogizer. The 2020 Coronavirus crisis was often compared with the 1918 flu epidemic, for instance. In addition to reasoning across time, we can also reason across space, comparing a current case with something that has been encountered within a different geographical space. Sticking with the Coronavirus example, the management of the disease in one country was often compared with that in another, with favorable or unfavorable lessons being drawn. Analogical reasoning plays a major role in crisis decision-making, in large part because decisions made under such circumstances have to be taken in rapid (and, indeed, almost immediate) fashion. When this is the case, it is often tempting to conclude that “this time will resemble last time” or “this problem will resemble a situation confronted elsewhere.” But these analogies are drawn, and decisions are made, by individuals who must confront their own very human cognitive psychological limitations. Since analogies are essentially heuristic devices that cut short the process of informational search, they are usually seen as good enough but do not ensure optimal decision-making. Analogies are at a premium during crisis-like events, but their “bounded” nature means that their use will sometimes lead to errors in processing information. In particular, the drawing of an analogy often leads to an underestimation of ways in which the current crisis is “different” from the baseline event.

2011 ◽  
Vol 6 (3) ◽  
pp. 19
Author(s):  
Linda R. Martin ◽  
Kathy C. Stevens

A current debate among accountants focuses on the amount of information collected by traditional cost accounting systems. Critics have said that these systems are inadequate because they provide insufficient detail for optimal decision making and have proposed the adoption of more elaborate cost systems. This paper analyzes cost accounting systems from a cost-benefit perspective and find that in some circumstances traditional methods with their aggregated level of detail are economically optimal.


Stat ◽  
2021 ◽  
Author(s):  
Hengrui Cai ◽  
Rui Song ◽  
Wenbin Lu

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Guangsheng Zhang ◽  
Xiao Wang ◽  
Zhiqing Meng ◽  
Qirui Zhang ◽  
Kexin Wu

PurposeTo remedy the inherent defect in current research that focuses only on a single type of participants, this paper endeavors to look into the situation as an evolutionary game between a representative Logistics Service Integrator (LSI) and a representative Functional Logistics Service Provider (FLSP) in an environment with sudden crisis and tries to analyze how LSI supervises FLSP's operations and how FLSP responds in a recurrent pattern with different interruption probabilities.Design/methodology/approachRegarding the risks of supply chain interruption in emergencies, this paper develops a two-level model of single LSI and single FLSP, using Evolutionary Game theory to analyze their optimal decision-making, as well as their strategic behaviors on different risk levels regarding the interruption probability to achieve the optimal return with bounded rationality.FindingsThe results show that on a low-risk level, if LSI increases the degree of punishment, it will fail to enhance FLSP's operational activeness in the long term; when the risk rises to an intermediate level, a circular game occurs between LSI and FLSP; and on a high level of risk, FLSP will actively take actions, and its functional probability further impacts LSI's strategic choices. Finally, this paper analyzes the moderating impact of punishment intensity and social reputation loss on the evolutionary model in emergencies and provides relevant managerial implications.Originality/valueFirst, by taking both interruption probability and emergencies into consideration, this paper explores the interactions among the factors relevant to LSI's and FLSP's optimal decision-making. Second, this paper analyzes the optimal evolutionary game strategies of LSI and FLSP with different interruption probability and the range of their optimal strategies. Third, the findings of this paper provide valuable implications for relevant practices, such that the punishment intensity and social reputation loss determine the optimal strategies of LSI and FLSP, and thus it is an effective vehicle for LSSC system administrator to achieve the maximum efficiency of the system.


2021 ◽  
pp. 103418
Author(s):  
Xiangqian Zhu ◽  
Wenfeng Wang ◽  
Suhong Pang ◽  
Chaoyin An ◽  
Xiaoliang Yang ◽  
...  

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