Cognitive Reactions to Rare Events: Perceptions, Uncertainty, and Learning

Organization Science, Vol. 20, pp. 925-937, 2009

13 Pages Posted: 6 Apr 2011

See all articles by William H. Starbuck

William H. Starbuck

University of Oregon - Charles H. Lundquist School of Business; New York University (NYU) - Department of Management and Organizational Behavior

Date Written: April 4, 2009

Abstract

Research provides some observations about learning from events that appear to be rare or quite unusual. All learning has uncertain consequences, but learning from rare events is especially problematic. Learners see many idiosyncrasies and exogenous interference, tendencies that suppress learning on an organizational scale. Rare events also rouse uncertainty and bring on reactions to uncertainty such as wishful thinking, reliance on prior beliefs, biased probabilities, a search for more data, cautious action, and playing to audiences. The most important contingencies affecting these reactions are the content and strength of prior beliefs: people are unlikely to learn if they think they have nothing to learn. Although learning from rare events is statistically unusual, and effective learning from rare events is rare, both individuals and organizations can benefit significantly from active efforts to learn from rare events.

Keywords: learning, rare events, uncertainty, reliable data

Suggested Citation

Starbuck, William H., Cognitive Reactions to Rare Events: Perceptions, Uncertainty, and Learning (April 4, 2009). Organization Science, Vol. 20, pp. 925-937, 2009, Available at SSRN: https://ssrn.com/abstract=1802829

William H. Starbuck (Contact Author)

University of Oregon - Charles H. Lundquist School of Business ( email )

1208 University of Oregon
Eugene, OR 97403-1208
United States

New York University (NYU) - Department of Management and Organizational Behavior ( email )

44 West 4th Street
New York, NY 10012
United States

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