Knightian Uncertainty in Strategy & Entrepreneurship

Abstract

'Knightian uncertainty' is a bit like a questionable character waiting to come on-stage, somewhat known to the audience and visible in the wings but few know its role. The concept of Knightian uncertainty has played a facilitating role in the development of both strategy and entrepreneurship research, but one that has vacillated in its relevance and interpretation. Early work in strategy, from Chester Barnard and others, directly confronted the difficulties that managers faced in navigating an unknowable future. The emerging dominance of micro-economics and its intimately related school of rationality swept such concerns aside. Concepts of learning, decision-making, and managing under uncertainty were transformed through supplementary concepts like ambiguity and information asymmetries, into a tractable mathematics that successfully hides the nature of Knightian uncertainty. Economics, as our dominant explanatory mode, has carried these assumptions into the study of strategy and, by extension, into entrepreneurship. In the last decade there has been a rising discontent with this single- perspective paradigm within both fields. The new work considered by this panel explores how the relaxation of the assumptions of rationality, bounded rationality, information asymmetries and the like leads to fertile scholarly opportunities. This symposium will provide an accessible venue for those in strategy and entrepreneurship who want to learn more about the dissidents’ perspective and how they might be involved.