We present a framework for theory-based learning and experimentation under uncertainty. Strategists' assumptions about how an envisioned future can be reached are likely incomplete and possibly wrong, for instance, if critical contingencies have been overlooked. We explain how strategists can learn from thinking about and testing necessary conditions for an envisioned future to materialize. By logically linking assumptions to consequences our framework allows drawing inferences from experiments with testable assumptions about elements of a strategy that cannot be tested without major investments. Our framework contains the first formal model of learning from arguments in the strategy literature. By using our framework, strategists can maintain focus on an envisioned future while at the same time systematically seeking out reasons and evidence for why they are wrong. Managerial Summary: We develop a framework that helps strategists to learn and understand what it takes to reach ambitious goals when there is substantial uncertainty. We ask strategists to formulate their assumptions as a theory: what needs to be true
Nudge and boost are two competing approaches to applying the psychology of reasoning and decision making to improve policy. Whereas nudges rely on manipulation of choice architecture to steer people towards better choices, the objective of boosts is to develop good decision-making competences. Proponents of both approaches claim capacity to enhance social welfare through better individual decisions. We suggest that such efforts should involve a more careful analysis of how individual and social welfare are related in the policy context. First, individual rationality is not always sufficient or necessary for improving collective outcomes. Second, collective outcomes of complex social interactions among individuals are largely ignored by the focus of both nudge and boost on individual decisions. We suggest that the design of mechanisms and social norms can sometimes lead to better collective outcomes than nudge and boost, and present conditions under which the three approaches (nudge, boost, and design) can be expected to enhance social welfare.
Nudge and boost are two competing approaches to applying the psychology of reasoning and decision making to improve policy. Whereas nudges rely on manipulation of choice architecture to steer people towards better choices, the objective of boosts is to develop good decision-making competences. Proponents of both approaches claim capacity to enhance social welfare through better individual decisions. We suggest that such efforts should involve a more careful analysis of how individual and social welfare are related in the policy context. First, individual rationality is not always sufficient or necessary for improving collective outcomes. Second, collective outcomes of complex social interactions among individuals are largely ignored by the focus of both nudge and boost on individual decisions. We suggest that the design of mechanisms and social norms can sometimes lead to better collective outcomes than nudge and boost, and present conditions under which the three approaches (nudge, boost, and design) can be expected to enhance social welfare.
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