Information, Uncertainty and Espionage

Review of Austrian Economics, 10.1007/s11138-022-00587-8

17 Pages Posted: 13 Jul 2022

See all articles by Peter J. Phillips

Peter J. Phillips

University of Southern Queensland - Faculty of Business

Gabriela Pohl

University of Southern Queensland - Faculty of Business, Education, Law and Arts

Date Written: June 29, 2022


Intelligence scholars are drawing on behavioural decision theory to improve decision-making under risk and uncertainty in intelligence and counterintelligence. Such an undertaking is essentially lacking without the Austrian school’s concepts of knowledge, discovery, (entrepreneurial) judgement, ignorance, rational calculation and, more generally, its analysis of human action in the face of true uncertainty. Decision theory, both orthodox and behavioural, depicts decision rather narrowly as a prioritisation task undertaken within a delineated problem space where the probabilities “sum to one”. From such a perspective, certain perennial challenges in intelligence and counterintelligence appear resolvable when in fact they are not, at least not when approached from the usual direction. We explain how Austrian concepts can complement efforts to improve intelligence decision-making. We conclude that the future strategic value of intelligence analysis is located beyond information acquisition, however fast and however vast. Intelligence agencies have no price signals to help them determine how much intelligence to produce. And governments have no price signals to moderate their appetites for the intelligence product. Ultimately, those agencies that recognise the implications of intelligence agencies as non-price institutions and adapt their decision-making processes may find that they have the upper hand over their rivals.

Keywords: Austrian School, Knowledge, Discovery, Ignorance, Uncertainty, Intelligence, Counterintelligence, Behavioural Decision Theory, Non-Price Institutions

JEL Classification: D01, D02, D8, D83, F52, H56, P22, Q11

Suggested Citation

Phillips, Peter J. and Pohl, Gabriela, Information, Uncertainty and Espionage (June 29, 2022). Review of Austrian Economics, 10.1007/s11138-022-00587-8, Available at SSRN:

Peter J. Phillips (Contact Author)

University of Southern Queensland - Faculty of Business ( email )

Toowoomba 4350, Queensland

Gabriela Pohl

University of Southern Queensland - Faculty of Business, Education, Law and Arts ( email )

Toowoomba, Queensland 4350

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