Decision-Making in Rats is Sensitive to Rare and Extreme Events: the Black Swan Avoidance

Most studies assessing decision-making under uncertainty use events with probabilities that are above 10-20 %. Here, to study decision-making in radical uncertainty conditions, Degoulet, Willem, Baunez, Luchini and Pintus provide a novel experimental design that aims at measuring the extent to which rats are sensitive - and how they respond - to extremely rare (below 1% of probability) but extreme events in a four-armed bandit task. Gains (sugar pellets) and losses (time-out punishments) are such that large - but rare - values materialize or not depending on the option chosen. The results show that all rats diversify their choices across options. However, most rats exhibit sensitivity to rare and extreme events despite their sparse occurrence, by combining more often options with extreme gains (Jackpots) and/or avoidance of extreme losses (Black Swans). In general, most rats choices feature one-sided sensitivity in favor of trying more often to avoid extreme losses than to seek extreme gains - that is, they feature Black Swan Avoidance.

Managing Nascent Digital Competition: An Assessment of Australian Merger Law under Conditions of Radical Uncertainty

The Australian Competition and Consumer Commission is among several national competition regulators that have recently expressed concerns about the inability of existing merger law to address competition issues that arise from acquisitions of digital start-ups. The unique characteristics of rapidly evolving digital markets present unprecedented challenges for traditional merger regimes that rely on predictions of future market conditions to justify intervention. This article argues that Australian merger law is unable to adequately address the uncertain risks presented by acquisitions of nascent competitors in digital markets. It further argues that traditional rule-based merger regimes are unable to properly navigate conditions of extreme uncertainty. An alternative regulatory model that is explored in detail is experimentalist governance, which promises to allow regulators and firms to respond to radical uncertainty by recursively crafting solutions to problems that emerge in dynamic digital markets over time.

Towards a Rational, Narrative-Based Design Framework for Navigating Radical Uncertainty in Engineering Design

This paper examines decision making under radical uncertainty in engineering design, that is, engineering decision making in those situations where it is not possible to know the outcomes and/or construct the utility functions and probabilities needed to support rational-human decision making. In these situations, despite being faced with radical uncertainty, engineers do (and must) proceed forward in a linear, clear, and predictable manner. Yet, they may not proceed in a manner that is well described by current engineering design frameworks. Examining the role of decision making in business and other social enterprises, Tuckett and Nikolic [1] have proposed conviction narrative theory (CNT) to describe how rational decision-makers confronted with situations in which insufficient information is available to support traditional decision-making tools use narrative and intuition to reach convincing and actionable decisions. This paper proposes that, in a manner similar to what is described in CNT, narrative and engineering judgment play a critical role in engineering design situations dominated by radical uncertainty. To that end, this paper integrates the traditional rational-human view of decision making as expressed by Hazelrigg in the well-known Decision-Based Design (DBD) framework and CNT as proposed by Tuckett and Nikolic. In the resulting rational, narrative-based design framework, narrative structures are used to describe and develop design alternatives and provide the ideas, beliefs, and preferences needed by the DBD framework. The resulting preferred design is expressed as a narrative and tested using engineering judgement. Specifically, the goal of the design process is expressed as a high-level guiding narrative that fosters the development of design narratives (design alternatives), and ultimately results in a convincing narrative that describes the preferred design. The high-level guiding narrative outlines the event(s), entity(s), preferences, and beliefs needed to support the design. The design narratives are narrative fragments that are nested within the high-level narrative and include the proposed action (idea), the specific challenges that the design faces, and the possible (but not yet verified) outcomes. The convincing narrative is the validated, preferred option that results from the DBD analysis and optimization process and is reviewed using engineering judgement. Following development of the rational, narrative-based design framework, the value of the framework is discussed within the context of practical engineering design.

Resilience and the Rise of Speculative Humanitarianism: Thinking Difference through the Syrian Refugee Crisis

This article explores the nature of resilience-informed international interventions today by thinking about ‘difference’. Up to the 1990s, international interventions were often characterised by a patronising tone in which backward others needed help to develop. Some 20 years later, key lessons learned were that others were so fundamentally different that efforts to assist them invariably failed. This article argues that contemporary approaches seeking to foster resilience are simultaneously propelled by both approaches. They are thus underpinned by two conflicting understandings of difference: the other that is in need and the other that cannot be attended. Even more, we contend that this contradiction is put to productive use in resilience-building: protracted crises today demand practitioners to ‘be there’, engaged permanently, to speculate, experiment, and affirm radical uncertainty. In order to analyse the novel features of resilience, we draw on Graham Harman’s speculative realism and look at policy programming of the Syrian refugee crisis.

The Strategic Imperative and the Paradigm Shift in Economics

The very idea of strategic thinking is quite opposed to the tradition of linking the choices of agents, individual or collective, to the process of maximization under constraints. The theory of general equilibrium has closed the door to the notion of strategy, just as the theory of generalized free trade has closed that of sovereignty. But this paradigm is falling apart. With a new approach of radical uncertainty, something made even more obvious with the COVID-19 pandemic, we are relearning the science and art of strategy, the more so because we are living in a world of a balance of power. But what would be the definition of strategy? Quite clearly we must distinguish between state and company strategy. This debate is also at the very center of the controversy over the role and meaning of institutions in economics. There is also a variety of strategies and those having a distinct appetite for risk must seriously consider whether to practice the art of strategy or not.

Radical Uncertainty Is Not Enough: (In)Justice Matters of Post-Qualitative Research

How can (post-)qualitative inquiry do justice in uncertain times? Post-qualitative inquiry, in its embrace of radical uncertainty, held promise for ethical and political responsibility in an entangled, hardly knowable world. Lately, we (authors) are doubtful of that promise. For over a year, through in-person and Zoom conversations, before and during the global pandemic, punctuated by weekly protests of a resurging Black Lives Matter movement, we reckoned with our hopes, doubts, dreams, and disappointments of justice in qualitative and post-qualitative inquiry. We reconstituted our dialogue in this paper around the topics most pressing to us: coming to justice, being wary of idols and ideology, and deciding what matters in post-qualitative inquiry. We came to the uneasy conclusion that, with no one to blame yet everyone responsible, the veneer of justice is peeling away from post-qualitative inquiry; that post-qualitative inquiry has, largely against its will, become a stable, divisive, and totalizing methodology; and that post-qualitative inquiry’s radical uncertainty has created the enabling conditions of indifference, apathy, and triviality. We urge (post-)qualitative inquirers to keep talking about justice and to balance a desire for post-theory with the responsibility for praxis, action, and decision-making.

Thrown off track? Adjustments of Asian business to shock events

The need for a better understanding of radical uncertainty might have never been greater. Ill-preparedness for natural hazards, a resurgence of serious public health concerns or illusions of control over unruly technology question the extent to which we can ‘really’ shape the world around us. Human-made crises, too, test how we routinely do things. We ask how organisations and actors within them prepare for a collapse of meaning and practise radical uncertainty. Given the breadth and depth of the region’s energy (and, as some would argue, turbulences), Asia provides a fitting context for exploring accommodation to and learning from low-probability, high-impact incidents. By reviewing the business and management research on shocks in Asia, we find that there is a strong human side to dealing with the unknown. We argue that what organisations and actors within them do prior, during and after a shock event is substantially contingent upon cultural environments. To elaborate, we discuss the role of the uncertainty avoidance dimension of national culture in dealing with shock events. We further combine this dimension with the universalism-particularism dimension to discuss future research directions. Our exploration of resultant differences in preparedness, resourcefulness and learning offers a more rounded inquiry into how Asian business actors deal with shocks.

Two paths of social innovation in the post-pandemic world

Purpose The Covid-19 pandemic has initiated a period of radical uncertainty, resulting in impacts on a scale that has and will continue to transform economies and societies across various contexts. Social innovation resonates with the challenges the pandemic presents. This paper aims to address the question of which form of social innovation will be most pivotal in the post-pandemic world. Design/methodology/approach The paper has been developed by reviewing key literature on social innovation, with a specific focus on the most current contributions of Moulaert and MacCallum and Mulgan. Findings Social innovation is embedded in debates around social change but the “type” of social change that dominates the future of social innovation is connected to how social innovation interacts at different scales and with different actors engaged in shaping change in specific contexts. Building upon extant knowledge of social innovation we can hypothesise two paths of social innovation emerging/intensifying: one that seeks economic reform with an emphasis on meeting social needs in new ways and another that seeks complete systemic change. Originality/value This is a reflective piece that by reviewing current contributions to the social innovation literature questions the post-pandemic future of the field.