IDEAS home Printed from https://ideas.repec.org/a/inm/orstsc/v9y2024i4p346-371.html
   My bibliography  Save this article

Theory Is All You Need: AI, Human Cognition, and Causal Reasoning

Author

Listed:
  • Teppo Felin

    (Huntsman School of Business, Utah State University, Logan, Utah 84322; and Saïd Business School, University of Oxford, Oxford OX1 1HP, United Kingdom)

  • Matthias Holweg

    (Saïd Business School, University of Oxford, Oxford OX1 1HP, United Kingdom)

Abstract

Scholars argue that artificial intelligence (AI) can generate genuine novelty and new knowledge and, in turn, that AI and computational models of cognition will replace human decision making under uncertainty. We disagree. We argue that AI’s data-based prediction is different from human theory-based causal logic and reasoning. We highlight problems with the decades-old analogy between computers and minds as input–output devices, using large language models as an example. Human cognition is better conceptualized as a form of theory-based causal reasoning rather than AI’s emphasis on information processing and data-based prediction. AI uses a probability-based approach to knowledge and is largely backward looking and imitative, whereas human cognition is forward-looking and capable of generating genuine novelty. We introduce the idea of data–belief asymmetries to highlight the difference between AI and human cognition, using the example of heavier-than-air flight to illustrate our arguments. Theory-based causal reasoning provides a cognitive mechanism for humans to intervene in the world and to engage in directed experimentation to generate new data. Throughout the article, we discuss the implications of our argument for understanding the origins of novelty, new knowledge, and decision making under uncertainty.

Suggested Citation

  • Teppo Felin & Matthias Holweg, 2024. "Theory Is All You Need: AI, Human Cognition, and Causal Reasoning," Strategy Science, INFORMS, vol. 9(4), pages 346-371, December.
  • Handle: RePEc:inm:orstsc:v:9:y:2024:i:4:p:346-371
    DOI: 10.1287/stsc.2024.0189
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/stsc.2024.0189
    Download Restriction: no

    File URL: https://libkey.io/10.1287/stsc.2024.0189?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:orstsc:v:9:y:2024:i:4:p:346-371. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.