Managing Uncertainty exam study guide Essay

Managing Uncertainty exam study guide Essay Managing Uncertainty exam study guide Essay Managing Uncertainty Exam Layout 4 questions – choose 2 1 page per answer The questions will cover: definitions, theory, concepts No trick questions Use examples in answers Relevant chapters: -Origins of Wealth 1 & 6 -Use ascent of money for definitions/examples The Cynefin Framework Definitions Basic Patterns of Complexity Emergence and Self-Organisation Macro-systems that come into existence due to actions of many (seemingly unrelated) agents Example: Traffic in India/ market price Connectivity Everything is interconnected Important because anything done by an agents could affect everything else in the system Example: changes the temperature of one ocean will eventually affect all 7. Burglary reduced due to cheap labour in china. Stuff wasn’t worth stealing anymore Non-Linearity Effect is not directly proportional to the cause Example: Feedback Effects Negative feedback effects balance the system, meaning that there is no change. Positive feedback effects amplify the change, think snowball effect. (Viral marketing) Example: Negative: snowball rolling down a snowy hill. Positive: Media’s effect on Lehman Chaos Immeasurable elements in the system at the time of its creation, which could lead to huge fluctuations in the final emerging conditions Example: butterfly effect Tipping Point The point where a system changes from one state (of being) to another. (The straw that broke the camel’s back) Example: Downfall of Lehman Brothers Path-Dependency Past actions create structures, which lead to the development of constraints in the system. History matters. There is always context. You never start from zero. Example: redoing or building a new underground line - Human Cognition Perfect Rationality: Spock Framing Bias Context the information is given in (can be used to influence resulting conclusions). Representativeness Drawing big conclusions from very small/biased samples. (Does not have full information) Availability Bias Basing conclusions on easily accessible information Difficulty judging risk Miss-assessing Threats