IDEAS home Printed from https://ideas.repec.org/a/oup/cambje/v41y2017i5p1279-1302..html
   My bibliography  Save this article

Unknowns, Black Swans and the risk/uncertainty distinction

Author

Listed:
  • Phil Faulkner
  • Alberto Feduzi
  • Jochen Runde

Abstract

Tony Lawson’s work on probability and uncertainty is both an important contribution to the heterodox canon as well as a notable early strand of his ongoing enquiry into the nature of social reality. In keeping with most mainstream and heterodox discussions of uncertainty in economics, however, Lawson focuses on situations in which the objects of uncertainty are imagined and can be stated in a way that, potentially at least, allows them to be the subject of probability judgments. This focus results in a relative neglect of the kind of uncertainties that flow from the existence of possibilities that do not even enter the imagination and which are therefore ruled out as the subject of probability judgments. This paper explores uncertainties of the latter kind, starting with and building on Donald Rumsfeld’s famous observations about known unknowns and unknown unknowns. Various connections are developed, first with Nassim Taleb’s Black Swan, and then with Lawson’s Keynes-inspired interpretation of uncertainty.

Suggested Citation

  • Phil Faulkner & Alberto Feduzi & Jochen Runde, 2017. "Unknowns, Black Swans and the risk/uncertainty distinction," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(5), pages 1279-1302.
  • Handle: RePEc:oup:cambje:v:41:y:2017:i:5:p:1279-1302.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/cje/bex035
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Feduzi, Alberto & Runde, Jochen, 2014. "Uncovering unknown unknowns: Towards a Baconian approach to management decision-making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 124(2), pages 268-283.
    2. Michael T. Pich & Christoph H. Loch & Arnoud De Meyer, 2002. "On Uncertainty, Ambiguity, and Complexity in Project Management," Management Science, INFORMS, vol. 48(8), pages 1008-1023, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michel S. Zouboulakis, 2022. "Elements of Risk in Classical Political Economy and Marx," Bulletin of Political Economy, Bulletin of Political Economy, vol. 16(2), pages 147-159, December.
    2. Mario Le Glatin & Pascal Le Masson & Benoit Weil, 2018. "Can organisational ambidexterity kill innovation? A case for non-expected utility decision making," Post-Print hal-01808566, HAL.
    3. Phil Faulkner & Stephen Pratten & Jochen Runde, 2017. "Cambridge Social Ontology: Clarification, Development and Deployment," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(5), pages 1265-1277.
    4. McMullen, Jeffery S. & Fitzsimmons, Jason R. & Shetty, Khyati & Ramoglou, Stratos, 2024. "A temporal typology of entrepreneurial opportunities: Implications for the optimal timing of entrepreneurial action," Journal of Business Venturing, Elsevier, vol. 39(1).
    5. Ramoglou, Stratos, 2021. "Knowable opportunities in an unknowable future? On the epistemological paradoxes of entrepreneurship theory," Journal of Business Venturing, Elsevier, vol. 36(2).
    6. Mora Cortez, Roberto & Johnston, Wesley J. & Ehret, Michael, 2023. "“Good Times–Bad Times” – Relationship marketing through business cycles," Journal of Business Research, Elsevier, vol. 165(C).
    7. S. Taniguchi, Kazuhiro, 2022. "Why Fukushima? A diachronic and multilevel comparative institutional analysis of a nuclear disaster," Energy Policy, Elsevier, vol. 167(C).
    8. Arbrie Jashari & Victor Tiberius & Marina Dabić, 2022. "Tracing the progress of scenario research in business and management," Futures & Foresight Science, John Wiley & Sons, vol. 4(2), June.
    9. Derbyshire, James & Morgan, Jamie, 2022. "Is seeking certainty in climate sensitivity measures counterproductive in the context of climate emergency? The case for scenario planning," Technological Forecasting and Social Change, Elsevier, vol. 182(C).
    10. Imko Meyenburg, 2022. "A possibilist justification of the ontology of counterfactuals and forecasted states of economies in economic modelling," Working Papers hal-03751205, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pascal Le Masson & Armand Hatchuel & Mario Le Glatin & Benoit Weil, 2018. "Designing Decisions In The Unknown: Towards A Generative Decision Model For Management Science," Post-Print hal-01937103, HAL.
    2. Agathe Gilain & Pascal Le Masson & Benoit Weil, 2018. "Managing Learning Curves In The Unknown: From ‘Learning By Doing’ To ‘Learning By Designing’," Post-Print hal-01900961, HAL.
    3. Manuel E. Sosa & Steven D. Eppinger & Craig M. Rowles, 2004. "The Misalignment of Product Architecture and Organizational Structure in Complex Product Development," Management Science, INFORMS, vol. 50(12), pages 1674-1689, December.
    4. Gu, Leilei & Liu, Zhongyang & Xu, Danyang, 2023. "The risk-mitigating role of corporate social responsibility in Chinese listed heavy-polluting companies: An extreme event experience perspective," Energy Economics, Elsevier, vol. 125(C).
    5. Ferry Koster & Mattijs Lambooij, 2018. "Managing Innovations: A Study of the Implementation of Electronic Medical Records in Dutch Hospitals," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 15(01), pages 1-23, February.
    6. Burmaoglu, Serhat & Sartenaer, Olivier & Porter, Alan, 2019. "Conceptual definition of technology emergence: A long journey from philosophy of science to science policy," Technology in Society, Elsevier, vol. 59(C).
    7. Derbyshire, James, 2017. "Potential surprise theory as a theoretical foundation for scenario planning," Technological Forecasting and Social Change, Elsevier, vol. 124(C), pages 77-87.
    8. Richard J. Arend, 2020. "Strategic decision-making under ambiguity: a new problem space and a proposed optimization approach," Business Research, Springer;German Academic Association for Business Research, vol. 13(3), pages 1231-1251, November.
    9. Sylvain Lenfle & Christoph Loch, 2017. "Has Megaproject management lost its way ? Lessons from History," Post-Print hal-03640779, HAL.
    10. James Derbyshire, 2020. "Answers to questions on uncertainty in geography: Old lessons and new scenario tools," Environment and Planning A, , vol. 52(4), pages 710-727, June.
    11. Hermano, Víctor & Martín-Cruz, Natalia, 2016. "The role of top management involvement in firms performing projects: A dynamic capabilities approach," Journal of Business Research, Elsevier, vol. 69(9), pages 3447-3458.
    12. Junguang Zhang & Dan Wan, 2021. "Determination of early warning time window for bottleneck resource buffer," Annals of Operations Research, Springer, vol. 300(1), pages 289-305, May.
    13. Eric Christian Brun, 2019. "Understanding a Business Incubator as a Start-Up Factory: A Value Chain Model Perspective," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 16(03), pages 1-28, May.
    14. Nuno Oliveira & Fabrice Lumineau, 2017. "How Coordination Trajectories Influence the Performance of Interorganizational Project Networks," Organization Science, INFORMS, vol. 28(6), pages 1029-1060, December.
    15. Feduzi, Alberto & Runde, Jochen, 2014. "Uncovering unknown unknowns: Towards a Baconian approach to management decision-making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 124(2), pages 268-283.
    16. Bordley, Robert F. & Keisler, Jeffrey M. & Logan, Tom M., 2019. "Managing projects with uncertain deadlines," European Journal of Operational Research, Elsevier, vol. 274(1), pages 291-302.
    17. Tao, Liangyan & Wu, Desheng & Liu, Sifeng & Lambert, James H., 2017. "Schedule risk analysis for new-product development: The GERT method extended by a characteristic function," Reliability Engineering and System Safety, Elsevier, vol. 167(C), pages 464-473.
    18. Christian Terwiesch & Christoph H. Loch & Arnoud De Meyer, 2002. "Exchanging Preliminary Information in Concurrent Engineering: Alternative Coordination Strategies," Organization Science, INFORMS, vol. 13(4), pages 402-419, August.
    19. Hazır, Öncü & Ulusoy, Gündüz, 2020. "A classification and review of approaches and methods for modeling uncertainty in projects," International Journal of Production Economics, Elsevier, vol. 223(C).
    20. Shipley, Margaret F. & Johnson, Madeline, 2009. "A fuzzy approach for selecting project membership to achieve cognitive style goals," European Journal of Operational Research, Elsevier, vol. 192(3), pages 918-928, February.

    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:oup:cambje:v:41:y:2017:i:5:p:1279-1302.. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/cje .

    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.