In a world where perfect information supposedly rules across the board, uncertainty certainly poses a challenge to mainstream economists. While some of the tenets of such assumption have been already addressed – via the theory of information asymmetries and the development of the rational expectations school, for example, uncertainty still poses critical questions.
For starters, uncertainty should not be confused with risk. The latter in a nutshell can be quantified using probability theory. Based on existing data and previous behavior, we could
say predict there is a 75 percent chance investments in the stock market can yield a 25 percent reward in say 5 years. This is not the case for uncertainty as here the outcome is entirely unknown. In other words, we have no idea what is going to
A few months ago, as I was finishing a paper on blockchain technology, I received an unexpected comment on Artificial Intelligence (AI from here on in) from one of the peer reviewers. While addressing the overall topic of innovation in the 21st Century, I mentioned in passing the revival of both AI and Machine Learning (ML, not be confused with Marxism-Leninism) as a good example. The reviewer requested the deletion of one of the two terms as, in his book, they were exactly the same. Not so fast, was my prompt reply. In the end, both survived the overall peer review.
Looking at the history of AI helps shed some light on these concepts. While the AI term was coined in the 1950s, the work of Alan Turing, limited by the use of analog/mechanical computers, can be seen as its launching pad. Digital