Reflections on Some Decision-Choice Theories on Uncertainty and Risk
Some reflections on theories of decision-choice activities under uncertainty and risk will be useful at this point. The theories may be grouped into those that are concerned with probabilistic belief, stochastic uncertainty and stochastic risk on one hand and those that are concerned with possibilistic belief, fuzzy uncertainty and fuzzy risk on the other. Our reflections will mostly focus on the former since it encompasses the bulk of the analysis. In each case, however, we shall suggest the entry point of the theories and the possible contribution on the aggregate and how the theories deal with uncertainty and risk in the substitution-transformation process in the dynamics of actual-potential duality. Let us keep in mind that the knowledge enterprise or the search for knowledge is about the understanding of the accidental processes in the behavior of the necessity as well as about what is not known in universal object set in order to find an explanation to what there is (the actual) and how what there is comes to be. This reflection on risk and uncertainty apply to economic and financial risks as well as general risk viewed in terms of cost-benefit balances.
The usefulness of acquired information-knowledge structure to decision-choice agents, lies in the understanding of some elements in the potential space, how some potential elements become possible elements whose underlying conflicts give rise to the necessity and corresponding elements for the actualization of a potential that gives rise to the problem of the understanding of the behavior of the probable and actual. This is a complex and complicated process. Our information-knowledge structure for dealing with the task of understanding the actual-potential transformations is incomplete, expanding and even shrinking sometimes leading to formation of probabilistic belief and the creation of stochastic uncertainty and risk associated with the necessity. Our information-knowledge structure in handling the task of understanding, is not only incomplete but in many cases vague, ambiguous and inexact leading to possibilistic belief and the creation of fuzzy uncertainty and risk that are in simultaneous association with the necessity. The two situations are further made difficult by cognitive limitations of decision-choice agents regarding information processing and appropriate logical calculus. All these lead to the basic notion that necessities are not fully comprehended and associate risks elude decision agents. Under this epistemic frame, how do theories about decision-agents agents help us to understand their behavior under uncertainty and risk? We shall turn our attention to the classical theories.
KeywordsPotential Outcome Social Risk Natural Risk Penumbral Region Fuzzy Risk
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