What is the difference between risk and uncertainty? Why does mainstream economics often overlook uncertainty altogether?

Amar Bhidé is a professor of Health Policy and Management at Columbia University, professor emeritus at Tufts University, and the author of several books, his latest of which is entitled, Uncertainty and Enterprise: Venturing Beyond the Known.

Greg and Amar discuss Amar’s recent book, which ties together threads from his previous works such as A Call for Judgment: Sensible Finance for a Dynamic Economy and The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World. They delve into the concept of uncertainty in economics, touch on the roles of imagination and evidence in decision-making, and discuss the limitations of current economic models and theories. Greg and Amar also examine the importance of storytelling and narrative in understanding and teaching economics and business.

*unSILOed Podcast is produced by University FM.*

Show Links:

Recommended Resources:

• Thomas Kuhn
• Friedrich Hayek
• Bob Schiller
• Joseph Stiglitz
• Information Asymmetry
• Keynesian Economics
• Paul Samuelson
• Mervyn King, Baron King of Lothbury
• Michael Porter
• Black–Scholes Model
• Disruptive Innovation Theory
• Gerd Gigerenzer
• Herbert A. Simon
• Richard Thaler
• Alfred D. Chandler Jr.
• John Stuart Mill
• Case method

Guest Profile:

• Faculty Profile at Columbia University
• Faculty Profile at Tufts University
• Bhide.net Homepage
• LinkedIn Profile
• Social Profile on X

His Work:

• Amazon Author Page
• Uncertainty and Enterprise: Venturing Beyond the Known
• Practical Knowledge
• A Call for Judgment: Sensible Finance for a Dynamic Economy
• The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World
• The Origin and Evolution of New Businesses
• Google Scholar Page

Episode Quotes:

A well-functioning board questions assumptions

11:40:A well-functioning board is questioning the assumptions, beliefs, and imaginations of the CEO and whatever the CEO has come up with. And these things, somebody cannot explain plausibly under standard economic models. Yet, they have clearly observable differences in what they produce. So the differences in these routines, I would argue, distinguish between the kinds of projects that an entrepreneur undertakes on his or her own. They distinguish between the kinds of projects that an angel investor is willing to undertake but a VC is not, and the kinds of projects that a VC is willing to undertake but the large corporation is not.

Using imagination as a bridge between the past and the future

24:12: If you want a bridge between what we know about the past and how we want to act vis-à-vis the future, we have to use imagination. And in the use of that imagination, the past provides the evidence; the imagination provides the bridge to what we do not know.

Balancing evidence and imagination in case discussions

57:06: A good case discussion is also teaching people how to discuss. But how to swap imaginations is not discourse in algebra; it is not discourse using statistics; it’s discourse using similes, metaphors, and analogies. How one balances evidence and imagination is such a vital skill in so many fields.