Two leading economists discuss decision making in conditions of radical uncertainty, where we can neither imagine all possible outcomes nor assign probabilities to future events.
Uncertainty surrounds all the big decisions we make in our lives. How much should we pay into our pensions each month? Should we take regular exercise? Expand the business? Change our strategy? Enter a trade agreement? Take an expensive holiday? We do not know what the future will hold. But we must make decisions anyway. So we crave certainties which cannot exist and invent knowledge we cannot have. But humans are successful because they have adapted to an environment that they understand only imperfectly. Throughout history we have developed a variety of ways of coping with the radical uncertainty that defines our lives. Mervyn King and John Kay, authors of a new book on decision making in conditions of radical uncertainty, will draw on biography, history, mathematics, economics and philosophy to highlight the most successful - and most short-sighted - methods of dealing with an unknowable future. They will argue that contemporary approaches to dealing with uncertainty rely on a false understanding of our power to make predictions, leading to many of the problems we experience today.
This event marks the publication of Radical Uncertainty: Decision-making for an unknowable future by Mervyn King and John Kay. To pre-order a copy of this book, which can be collected from independent bookshop Pages of Hackney at the event, please go to Radical Uncertainty: Decision-making for an unknowable future.
John Kay is a Fellow of St John's College, Oxford and has held professorial appointments at the University of Oxford, London Business School and LSE.
Mervyn King was Governor of the Bank of England from 2003 to 2013 and is currently Professor of Economics and Law at New York University and School Professor of Economics at the London School of Economics and Political Science.
Tim Besley is School Professor of Economics of Political Science and W. Arthur Lewis Professor of Development Economics in the Department of Economics at LSE.
LSE IDEAS (@lseideas) is LSE's foreign policy think tank. We connect academic knowledge of diplomacy and strategy with the people who use it.
Twitter Hashtag for this event: #LSEUncertainty
A podcast of this event is available to download from Radical Uncertainty: decision making for an unknowable future.
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