Rationality and Uncertainty

Learning and rationality in a complex environment

Rational choice under uncertainty is at the same time presupposition and consequence of learning. The feedback between rationality and learning has different features in environments characterized by different degrees of complexity. This may be clarified by delving into the foundations of decision theory under uncertainty that allows a deeper understanding of the strict correspondence between d...

Reform by reflection: Schön’s legacy to management practice in times of uncertainty

In this paper, we revisit Donald Schön’s scholarly work on “handling uncertainty”, suggesting that in order to cope reasonably well with uncertainty, practitioners should be encouraged to take a reflective existential stance, aimed to explore their own tacit personal style (i.e., theories-in-use). They should (i) recall and reflect on their theories-in-use to bear on the phenomenon, (ii) metaph...

Uncertainty, rationality and learning: a Keynesian perspective

Rational choice under uncertainty is at the same time presupposition and consequence of learning. The feedback between rationality and learning may be clarified by delving into the foundations of decision theory under uncertainty. This permits a deeper understanding of the strict correspondence between different modalities of uncertainty and different concepts of rationality and learning, which...

Relating Choice of Agent Rationality to Agent Model Uncertainty - an experimental study

The importance of model uncertainties arising from different assumptions about human behavior as opposed to parameter uncertainty is often neglected in integrated models for policy development. In this study, so-called agent model uncertainty is estimated in relation to the choice of agent rationality. A classification scheme is proposed which allows us organize decision models according to the...

Rationality in the face of uncertainty

Rational Choice Theory: A Cultural Reconsideration

Economists have heralded the formulation of the expected utility theorem as a universal method of choice under uncertainty. In their seminal paper, Stigler and Becker (Stigler & Becker, 1977) declared that “human behavior can be explained by a generalized calculus of utility-maximizing behavior” (p.76). The universality of the rational choice theory has been widely criticized by psychologists, ...