How to cope with (new) uncertainties: A bounded rationality approach

Arbeitspapier

A rigorous reconstruction of scenario-based real choice making reveals the incompleteness of decision-modeling and the practical prevalence of uncertainty. Theoretically complete models conceal it. As a remedy a scenario-based procedure of coping with uncertainty can prescribe how the boundedly rational decision-maker should proceed from her or his internal point of view. Though models of substantive rationality cannot serve as guidance for decision-making under uncertainty, we can improve prescriptions for coping with uncertainties in view of evidence of substantive success or failure. Decision theory should aim for a reflective equilibrium incorporating internalist-prescriptive and externalist-descriptive aspects to turn good into better practice.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Economics Discussion Papers ; No. 2015-46

Classification and Topics

• Classification: Wirtschaft ; Information, Knowledge, and Uncertainty: General ; Microeconomic Behavior: Underlying Principles ; Firm Behavior: Theory
• Subject: uncertainty ; procedural rationality ; satisficing ; risk-communication

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Güth, Werner ; Kliemt, Hartmut
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/111176
• Last update: 10.03.2025, 11:44 AM CET