Skip to content
Demian ReidelPhysicist and economist

Ideas / Judgment under uncertainty

All ideas

Models × decisions

Judgment under uncertainty

Published
Reading time
3 min
By
Demian Reidel
The purpose of a model is not to eliminate uncertainty, but to expose assumptions, bound what can be measured, and show where judgment begins.

Three kinds of unknown

Some uncertainty can be estimated. Some can only be explored through scenarios. Some reflects an incomplete understanding of the system itself. Treating all three alike creates either false precision or avoidable paralysis.

The first act of judgment is to name which kind is present. The next is to choose where commitment is warranted and where preserving options has value.

Build for revision

A decision process should make its assumptions legible, define signals that would change the thesis, and preserve enough institutional memory to learn when the world disagrees.

Evidence

Notes and primary sources

  1. SRC-000011Space-time transformations within the path-integral approach to stochastic processesAmerican Physical Society
  2. SRC-000013Statistical properties of random asymmetrical neural networksElsevier / ScienceDirect
  3. SRC-000018QFR Capital Management LP — adviser summaryU.S. SEC Investment Adviser Public Disclosure
  4. SRC-000053El fin del efectivoTED