Fighting Uncertainty with Uncertainty: Time Value of Knowledge and the Net Present Value (NPV) of Knowledge Machines
26 Pages Posted: 19 Oct 2017 Last revised: 21 Nov 2017
Date Written: November 21, 2017
We can overcome uncertainty with uncertainty. Using randomness in our choices and in what we control, and hence in the decision making process, could potentially offset the uncertainty inherent in the environment and yield better outcomes. The example we develop in greater detail is with regards to the creation and dissemination of knowledge. That there is uncertainty in this process, is perhaps, not to be debated. Our initial analysis shows that one of the better solutions, we can accomplish in this space, might be described by the prescription, “Don’t Simply Optimize, Also Randomize; best described by the term - Randoptimization”. We specifically show that the best decision we can make, with regards to the selection of articles by journals (and in a subsequent paper, with respect to school admissions), requires us to formulate a cutoff point, or, a region of optimal performance and randomly select from within that region of better results. The policy implication (for all fields) is to randomly select papers, based on publication limitations (journal space, reviewer load etc.) from an overall pool of submissions, that have a single shred of knowledge (or one unique idea) and have the editors and reviewers coach the authors to ensure a better final outcome.
Keywords: Knowledge, NPV, Net Present Value, Machine, Time Value, Journal, Ranking, University, Admission
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