On the Mitigability of Uncertainty and the Choice between Predictive and Nonpredictive Strategy

On entrepreneurial decision logics under conditions of uncertainty: an attempt to advance the current debate

“…As Packard and Clark (2020b: 8) expressly remain "open to further conversation," the present paper seeks to build on and advance the ongoing debate by acknowledging both Packard and Clark's (2019;2020a;2020b) work and the criticisms leveled against it (Arend 2020; Holmes and Westgren 2020). Similarly to Packard and Clark (2020a: 2) who emphasize that they "easily acknowledge that there are reasons to disagree with our conclusions," we find it not unreasonable that the critics take umbrage with Packard and Clark's (2019) ideas, and for two reasons in particular: First, the boundary conditions of the presented uncertainty distinctions seem ambiguous, both internally (as indicated by Holmes and Westgren (2020)) and in relation to Knight's (1921) wellestablished and widely accepted distinction between uncertainty and risk.…”

“…Hence, the proposals to advance the debate we provide in this paper must not be misinterpreted as a criticism of attempts to research uncertainty and its particular impacts on entrepreneurial decision-making. While emphasizing the fundamental importance of researching uncertainty, the current paper goes one step further in that it suggests supplementing the notion of uncertainty developed in entrepreneurship research, and its most recent manifestation as suggested by Packard and Clark (2019) in particular, with the broader notion of ill-structuredness of decision problems (Simon and Newell 1958) known from normative decision theory. Doing so makes it possible to better conceptualize the complete range of knowledge problems (Townsend et al 2018) entrepreneurs face, inclusive of uncertain options and/or outcomes.…”

“…Uncertainty in general, and Packard and Clark (2019) in particular, warrant further discussion; Packard and Clark's paper has already attracted comments on various grounds. Arend (2020: 702) mocks "the irony of being certain on how to deal with uncertainty," and considers it logically impossible to prescribe in general terms what kind of logic an entrepreneur should prefer in a situation of immitigable uncertainty.…”

“…Holmes and Westgren (2020) also comment on Packard and Clark (2019). However, they focus on a different aspect of the latter's reasoning choosing to direct attention particularly to Packard and Clark's typology and arguing that mitigable and immitigable uncertainty do not map well onto their claimed pendants epistemic and aleatory uncertainty respectively, as Packard and Clark (2019) state they do.…”

“…Similarly to Packard and Clark (2020a: 2) who emphasize that they "easily acknowledge that there are reasons to disagree with our conclusions," we find it not unreasonable that the critics take umbrage with Packard and Clark's (2019) ideas, and for two reasons in particular: First, the boundary conditions of the presented uncertainty distinctions seem ambiguous, both internally (as indicated by Holmes and Westgren (2020)) and in relation to Knight's (1921) wellestablished and widely accepted distinction between uncertainty and risk. Second, it seems disputable whether Packard and Clark's (2019) normative approach is indeed suited to their specific analysis of entrepreneurial decision-making. We are afraid that a normative prescription of preferable decision logics is unsustainable, albeit for reasons other than probabilistic logic as suggested by Arend (2020).…”