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Deciding Not To Decide

Author

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  • Ellsaesser, Florian
  • Fioretti, Guido

Abstract

Sometimes unexpected, novel, unconceivable events enter our lives. The cause-effect mappings that usually guide our behaviour are destroyed. Surprised and shocked by possibilities that we had never imagined, we are unable to make any decision beyond mere routine. Among them there are decisions, such as making investments, that are essential for the long-term survival of businesses as well as the economy at large. We submit that the standard machinery of utility maximization does not apply, but we propose measures inspired by scenario planning and graph analysis, pointing to solutions being explored in machine learning.

Suggested Citation

  • Ellsaesser, Florian & Fioretti, Guido, 2022. "Deciding Not To Decide," MPRA Paper 111546, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:111546
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    File URL: https://mpra.ub.uni-muenchen.de/112115/2/MPRA_paper_112115.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Uncertainty; Cognitive Maps; Machine Learning; Scenario Planning; Sense-Making; Bounded Rationality;
    All these keywords.

    JEL classification:

    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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