Updating ""Small World Representations"" in strategic decision-making under extreme uncertainty

Click here to view record
Main author: Feduzi, Alberto
Other authors: Runde, Jochen
Cabantous, Laure
Faulkner, Philip
Loch, Christoph
Format: Journal Article           
Online access: Click here to view record


id eprints-29955
recordtype eprints
institution SOAS, University of London
collection SOAS Research Online
language English
language_search English
description The behavioral strategy literature investigates how decision makers might use Small World Representations (SWRs) to guide their actions in situations of extreme uncertainty, but says little about how such representations should be updated during the implementation phase. In this paper, we provide a framework to capture the relationship between SWRs, unknowns and Black Swans, and, drawing on the psychology of reasoning literature, explore different heuristic methods of inquiry that decision makers might use to update their SWRs. We compare the performance of two such methods⎯disconfirmation and counterfactual reasoning⎯in highly uncertain situations characterized by ambiguous and non-definite information. We find that counterfactual reasoning is superior to disconfirmation with respect to (1) counteracting the confirmation bias, (2) promoting the exploration of the scenario space, and (3) favoring the adoption of actions able to mitigate or exploit the consequences of Black Swans.
format Journal Article
author Feduzi, Alberto
author_facet Feduzi, Alberto
Runde, Jochen
Cabantous, Laure
Faulkner, Philip
Loch, Christoph
authorStr Feduzi, Alberto
author_letter Feduzi, Alberto
author2 Runde, Jochen
Cabantous, Laure
Faulkner, Philip
Loch, Christoph
author2Str Runde, Jochen
Cabantous, Laure
Faulkner, Philip
Loch, Christoph
title Updating ""Small World Representations"" in strategic decision-making under extreme uncertainty
publisher Academy of Management
publishDate 2018
url https://eprints.soas.ac.uk/29955/

Similar items