Ambiguity

Ambiguity is present in virtually all real-life situations and are those ‘situations in which we do not have sufficient information to quantify the stochastic nature of the problem. It is a lack of knowledge as
to the ‘basic rules of the game’ where cause-and-effect are not understood and there is no precedent for
making predictions as to what to expect

Ambiguity is often used, especially in the context of VUCA, to cover situations in situations that have:

  • Doubt about the nature of cause and effect
  • Little to no historical information to predict the outcome
  • Difficult to forecast or plan for

It is important to answer whether there are risks of lack of experience and predictability that might affect the situation, and interrogate our unknown unknowns.

People are ambiguity averse in that they prefer situations in which probabilities are perfectly known to situations in which they are unknown.

Ambiguity is best resolved by experimentation.

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