Straight and crooked thinking about uncertainty

by Matthew Leitch, 10 April 2002

"Straight and crooked thinking" by Robert H. Thouless, first published in 1930, is a great little book that helped me recognise a range of common reasoning errors, avoid them in myself, and counter them in others. Some of the errors are genuine mistakes, others are sophistry - saying anything to get your way - while others are a muddle of the two.

The book's great strength is that it identifies and names errors that are specific and easily recognised. It also explains them well and illustrates them with many examples. This web page uses the same approach to highlight the many errors people make when dealing with uncertainty, either:

• reasoning from inconclusive evidence; or
• reasoning about uncertain future outcomes.

Muddled thinking about uncertainty is something most people encounter frequently, from worries about health risks to messy and stressful arguments about business decisions. Typically, uncertainty increases the stress you feel and your chances of being wrong. When you're sharing decisions with other people the problems of stress and muddle are far greater. If you have ever been in a meeting about budgets you will know what I mean.

I don't think anybody has found the right way to think about uncertainty, but some things are clearly mistakes we can learn to avoid. I hope you find at least some surprises on these pages.

• Knowing our limitations
• Errors when thinking about degrees of certainty
• Errors in calculations
• Getting things done

Conclusion

Crooked thinking about uncertainty is a huge subject, and these pages have just skimmed over a number of the most common and damaging types. Almost every topic really deserves a detailed examination on its own. I hope I've caught you out at least once and given you something to think about. If you're involved in management control, corporate governance, personnel, public relations, decision making of almost any kind, financial modelling, or any of the other specific activities I've discussed you have either made some of these mistakes or you have a friend who has.

Acknowledgements: I would like to thank all those who have read this page and commented. I consider every point carefully and often make improvements as a result.

About the author: Matthew Leitch is an independent consultant and researcher specialising in internal control and risk management. He is a Chartered Accountant with a degree in psychology whose past career includes software development, marketing, auditing, accounting, and consulting. He spent 7 years as a controls specialist with PricewaterhouseCoopers, where he pioneered new methods for designing internal control systems for large scale business and financial processes, through projects for internationally known clients.

Contact the author at: matthew@managedluck.co.uk