Judgment and decision making with unknown states and outcomes

By Michael Smithson

Michael Smithson
Michael Smithson (biography)

What issues arise for effective judgments, predictions, and decisions when decision makers do not know all the potential starting positions, available alternatives and possible outcomes?

A shorthand term for this collection of possible starting points (also known as prior states), alternatives, and outcomes is “sample space.” Here I elucidate why sample space is important and how judgments and decisions can be influenced when it is incomplete.

Why is sample space important?

When it comes to dealing with unknowns, economists and others traditionally distinguish between “risk” (where probabilities can be assigned to every possible outcome) and “uncertainty” (where the probabilities are vague or unknown). Both of those versions of unknowns assume that decision makers know everything about the sample space.

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How can we know unknown unknowns?

By Michael Smithson

Michael Smithson
Michael Smithson (biography)

In a 1993 paper, philosopher Ann Kerwin elaborated a view on ignorance that has been summarized in a 2×2 table describing crucial components of metacognition (see figure below). One margin of the table consisted of “knowns” and “unknowns”. The other margin comprised the adjectives “known” and “unknown”. Crosstabulating these produced “known knowns”, “known unknowns”, “unknown knowns”, and unknown unknowns”. The latter two categories have caused some befuddlement. What does it mean to not know what is known, or to not know what is unknown? And how can we convert either of these into their known counterparts?

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Four things everyone should know about ignorance

By Michael Smithson

michael-smithson
Michael Smithson (biography)

“Ignorance” is a topic that sprawls across a grand variety of disciplines, professions and problem domains. Many of these domains have their own perspective on the unknown, but these are generally fragmentary and often unconnected from one another. The topic lacks a home. Until fairly recently, it was a neglected topic in the humanities and human sciences.

I first started writing about it in the 1980’s (e.g., my book-length treatment, Ignorance and Uncertainty: Emerging Paradigms), but it wasn’t until 2015 that the properly compiled interdisciplinary Routledge International Handbook on Ignorance Studies (Gross and McGoey 2015) finally appeared.

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