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

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  • William H. Starbuck

    (Lundquist College of Business, University of Oregon, Eugene, Oregon 97403)

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.

Suggested Citation

  • William H. Starbuck, 2009. "Perspective ---Cognitive Reactions to Rare Events: Perceptions, Uncertainty, and Learning," Organization Science, INFORMS, vol. 20(5), pages 925-937, October.
    • Handle: RePEc:inm:ororsc:v:20:y:2009:i:5:p:925-937
    DOI: 10.1287/orsc.1090.0440
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    References listed on IDEAS

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