When uncertainty is all around us, and the facts are not clear, how can we make good decisions?
We do not know what the future will hold, particularly in the midst of a crisis, but we must make decisions anyway. We regularly crave certainties which cannot exist and invent knowledge we cannot have, forgetting that humans are successful because we have adapted to an environment that we understand only imperfectly. Throughout history we have developed a variety of ways of coping with the radical uncertainty that defines our lives.
This incisive and eye-opening book draws on biography, history, mathematics, economics and philosophy to highlight the most successful - and most short-sighted - methods of dealing with an unknowable future. Ultimately, the authors argue, the prevalent method of our age falls short, giving us a false understanding of our power to make predictions, leading to many of the problems we experience today.
Author(s): John Kay; Mervyn King
Edition: 1
Publisher: Little, Brown Book Group
Year: 2020
Language: English
Pages: 544
City: London
Tags: Economics, Finance, Business & Management; Economics -- Psychological aspects; Decision making -- Economic aspects; Consumer Behavior
Acknowledgements
Preface
Part I
Introduction: The Nature of Uncertainty
1 The Unknowable Future
2 Puzzles and Mysteries
3 Radical Uncertainty is Everywhere
Part II
The Lure of Probabilities
4 Thinking with Probabilities
5 A Forgotten Dispute
6 Ambiguity and Vagueness
7 Probability and Optimisation
Part III
Making Sense of Uncertainty
8 Rationality in a Large World
9 Evolution and Decision-making
10 The Narrative Paradigm
11 Uncertainty, Probability and the Law
12 Good and Bad Narratives
13 Telling Stories Through Numbers
14 Telling Stories Through Models
15 Rationality and Communication
16 Challenging Narratives
Part IV
Economics and Uncertainty
17 The World of Finance
18 Radical Uncertainty, Insurance and Investment
19 (Mis)Understanding Macroeconomics
20 The Use and Misuse of Models
Part V
Living with Uncertainty
21 Practical Knowledge
22 Adapting to Radical Uncertainty
23 Embracing Uncertainty
Appendix: Axioms of Choice under Uncertainty
Notes
Bibliography
Further Reading
Index
