Fighting Uncertainty with Uncertainty: Time Value of Knowledge and the Net

Present Value (NPV) of Knowledge Machines

Ravi Kashyap

SolBridge International School of Business / City University of Hong Kong

November 21, 2017

Keywords: Value Knowledge; Machine; Time; Net Present; Fight; Uncertainty; Social; Natural; Science;

Randoptimization

JEL Codes: C61 Optimization Techniques; C44 Operations Research / Statistical Decision Theory; D81 Criteria

for Decision-Making under Risk and Uncertainty

Contents

1 Abstract 1

2 Knowledge for What Sake? 2

3 Questions & Answers, Q&A, Definitions and Assumptions, D&A, in our DNA 4

4 Switching on Knowledge Machines 6

4.1 Notation and Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

4.2 Once On, Never Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

4.3 Unintended Consequences of Journal Submissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

4.4 Tolerating More Unintended Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

5 The End Game 19

1 Abstract

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.

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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.

2 Knowledge for What Sake?

Despite the apparent lack of consensus, as to what knowledge really is and a possibly demonstrable absence of

well accepted reasons for maybe, why we even need knowledge (as the name of this section suggests, whatever

knowledge might be, if it can be traded for whichever sake, the Japanese drink, that we might be able to ferret

out, that might be a good exchange, or trade); most would agree that knowledge is valuable (End-note 1; Russell

1948 is perhaps an ideal place to start examining the relation between individual experience and the general body

of scientific knowledge). End-note 2 has a collection of quotes starting from the 1st century AD, stating the ancient

belief that knowledge has worth. That the Wikipedia link, as of Oct-16-2017, about the value of knowledge, has

material only from as recently as 2000 years ago, shows how limited our knowledge, regarding the value, history

has placed on knowledge is. (Dancy, Sosa & Steup 2009) is an excellent collection of articles on leading theories,

thinkers, ideas, distinctions and concepts in epistemology (End-note 3).

A recent attempt, in the context of the time periods discussed above, (Martin 1996), acknowledges that, measuring

the value of knowledge has not progressed much beyond an awareness, that traditional accounting practices are

misleading and can lead to wrong business decisions. (Bozeman & Rogers 2002) admit that determining the value

of scientific and technical knowledge poses a great many problems (the value of knowledge shifts dramatically over

time as new uses for the knowledge emerge; a related problem is that market-based valuation of knowledge is an

inadequate index of certain types of scientific knowledge). They present an alternative framework for the value of

scientific and technical knowledge, one based not on market pricing of information, but instead, on the intensity

and range of uses of scientific knowledge. Their churn model of scientific knowledge value emphasizes the distinctive

properties of scientific and technical knowledge and focuses on the social context of its production. They consider

the value of scientific and technical knowledge in enhancing the activities of the set of individuals who interact in

the demand, production, technical evaluation, and application of scientific and technical knowledge.

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As with everything else, it is slightly concerning that attempts are being made to manage something that has

barely begun to be understood, but perhaps attempts at controlling something, might help reveal its true value.

(Stewart & Ruckdeschel 1998) address past, present, and future economics and management, including a framework

toward knowledge resources and information sharing in organizations. (Chyi Lee & Yang 2000) introduce the knowl-

edge value chain model as a knowledge management framework. The model consists of knowledge infrastructure

(knowledge worker recruitment, knowledge storage capacity, customer/supplier relationship, among other things),

the process of KM (knowledge acquisition, knowledge innovation, knowledge protection, knowledge integration, and

knowledge dissemination), and the interaction among those components resulting in knowledge performance.

(Carlucci, Marr & Schiuma 2004) explore the fundamental issue of how knowledge management initiatives impact

business performance. By considering works in the knowledge and performance management, they identify strategic,

managerial, and operational dimensions of knowledge management and allow linking knowledge management with

core competencies, strategic processes, business performance, and finally, with value creation. (Sakaiya, Fields &

Marsh 1991) prophesies a new economic and social value system for the coming millennium built on the belief that

a knowledge-value revolution will unfold, as advanced nations have to cope with an utter transformation of their

moral standards. (Hendriks & Vriens 1999) discuss some of the issues with, Knowledge-based systems (KBS), which

provide a way of formalizing and automating knowledge. KBS are the outcome of a knowledge engineering process

that may be seen as providing some of the building blocks of knowledge management. Their discussion addresses

the issue of how knowledge engineerings relates to a broader perspective of knowledge management, including some

ways to identify the issues to be addressed when valuing KBS as potential measures for knowledge management.

(Lee & Lan 2007) investigate the shift from a knowledge repository approach, the prominent method to handle

large volumes of information since the instigation of World Wide Web, to a conversational collaborative foundation

of knowledge management. This shift is necessary since the knowledge residing in the repositories has not been

accumulated or integrated to generate new intelligence. They demonstrates the opportunity for more effective and

feasible knowledge management and propose basic applications of collaborative intelligence (defined as the measure

of the collaborative ability of an entity or a group, it rests on three pillars: collaboration technology environment,

including chats, wikipedia or give and get model of information sharing; rallying the area of knowledge, also to be

understood as open creation of content and storage outside the personal computer; and intellectual cooperation).

(Petrash 1996) is a discussion of the experiences of Dow Chemical company in developing a vision, functional

systems, and tools, for the value management of its intellectual assets (IA). Such an effort could lead to the

development of some competencies in the area of “measuring and valuing” IA, and in developing systems that

support the leveraging of IA for maximum value.

It is heartening to know that organizations are deeply engaged in coming up with ways to enhance, share and

value knowledge. (Nonaka 1994; Nonaka, Takeuchi & Umemoto 1996) are excellent sources about theories of

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organizational knowledge creation; (Barnett 1999) mentions that even universities, which are solely meant to create

and spread knowledge might have lost their way and how they need a new sense of purpose. (Delanty 2001) is about

the role of universities in the knowledge society. In later sections, we hope to contribute to this effort to refocus

what knowledge stands for and how to best to spread it, by starting with the intuition for one method to value

knowledge. We formalize this idea with a series of axioms and models. We then show how this method signifies,

that the best way for journals to select submissions would be randomly, once a paper meets certain basic quality

criteria.

3 Questions & Answers, Q&A, Definitions and Assumptions, D&A, in

our DNA

It would not be entirely incorrect to state that the majority of the attempts at knowledge creation, start with

answering questions. In present day society, we seem to be focused on answering questions that originate in

different disciplines. Hence, as a first step, we recognize that one possible categorization of different fields can be

done by the set of questions, a particular field attempts to answer. Since we are the creators of different disciplines,

but not the creators of the world in which these fields need to operate, the answers to the questions posed by any

domain can come from anywhere or from phenomenon studied under a combination of many other disciplines.

Hence, the answers to the questions posed under the realm of knowledge creation, can come from seemingly diverse

subjects, such as, physics, biology, mathematics, chemistry, marketing, economics, finance and so on. This suggests

that we might be better off, identifying ourselves with problems and solutions, which tacitly confers upon us the title,

Problem Solvers, instead of calling ourselves physicists, biologists, psychologists, marketing experts, economists and

so on. This quest for answers is bounded only by our imagination (Calaprice 2000).

As we linger on the topic of Questions & Answers, Q&A. The field that is most concerned with the valuation of

assets (for lack of knowledge of a better word, or terminology, on behalf of the authors, let us categorize knowledge

under the umbrella of assets) is finance. Hence, it should not come as a surprise that finance can provide a very

surprising answer to the question: what is the value of knowledge in any field? Any answer we wish to seek would

depend on some Definitions and Assumptions, D&A. But if we change those D&A, we might get different Q&A,

even telling us that Q&A and D&A might be in our very DNA, the biological one (End-note 5). A related question,

that comes up is: what is finance? The answer is that finance is a game, where there are only three simple decisions

to be made: Buy, Sell or Hold; the complication are mainly to get to these results (Kashyap 2015).

As we go about applying finance to assess the value of knowledge in all domains; we need to bear in mind that

all valuations are subjective, since they are done by social beings and a hall mark of the social sciences is the lack

4
of objectivity (Kashyap 2017). Here we assert that objectivity is with respect to comparisons done by different

participants and that a comparison is a precursor to a decision.

Assumption 1. Despite the several advances in the social sciences, we have yet to discover an objective measuring

stick for comparison, a so called, True Comparison Theory, which can be an aid for arriving at objective decisions.

Hence, despite all the uncertainty in the social sciences, the one thing we can be almost certain about is the

subjectivity in all decision making.

For our present purposes, the lack of such an objective measure means that the difference in comparisons, as assessed

by different participants, can give rise to different valuations for the same element of knowledge (or asset). We

consider two extreme individuals and their perspectives, which would influence their valuations.

Definition 1. Type A person, who has All the known knowledge in the universe. So if any new knowledge

becomes available, he is desperate to have it, since without this new knowledge he is incomplete.

We have to mention here that a type A person would place an extremely high valuation on every element of

knowledge he already has and any new knowledge that might come up.

Definition 2. Type Z person, who has no knowledge about anything in the universe. So he cares nothing about

any knowledge, wants nothing and his valuation for all pieces of knowledge would be Zero.

It is worth noting that there might be views expressed by people, (or, people with beliefs, in this very world that

we live in), who do not seek anything, not even knowledge, that once you stop looking for things, you will have

everything. This would be a contradiction to our definition, since in this case, the type Z person is the one who

wants nothing and would put a valuation of zero on any new knowledge, but he would actually have everything, and

he becomes the type A person. Alternately, the type A person, has all the knowledge in the world because he wants

nothing, or his valuation of everything, including knowledge is zero, making him the type Z person. The scope of

our discussion will be restricted to someone who is between Type A and Z, so that he has a non-zero valuation of

every piece of knowledge.

To better understand knowledge, let us first start with what is not knowledge. Anything that we don’t know is

not knowledge. Many times, what we don’t know is scary or can cause confusion or frustration. Confusion and

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Frustration, though, scary and ugly to begin with, can be powerful motivators, as long as, we don’t let them bother

us. Because,

1. Confusion is the beginning of Understanding.

2. Necessity, is the mother of all creation / innovation / invention, but the often forgotten father, is Frustration,

which is sometimes, even more necessary, than necessity herself.

What we learn from the story of, Beauty and the Beast, is that, we need to love the beasts to find beauty. Hence,

if we start to love these monsters (Confusion and Frustration), we can unlock their awesomeness and find truly

stunning solutions. We will further try to provide one definition, for what knowledge might be, keeping in mind

that, as generic as we want to make any definition, we need to be open to the possibility that the definition might

need to be altered, depending on the specifics of the situation.

Definition 3. Knowledge is a connection between different elements of this universe, the elements could be many

(more than two), two or in some cases, a link from one element to the same element. This might require us to clarify

what is an element here. We suggest that the element discussed here is anything that belongs to this universe and

any characteristic of that element, as observable in this universe. We emphasize the word universe here, since this

definition would need to be modified, once we establish (there is already speculation regarding this eventuality) the

possibility of other universes (End-note 6).

This tells us that, knowledge from one time period can be useful in another time period, should there be a possibility

of the same connection reoccurring or using the connection we know about to create a modified or new connection,

we use existing connections discovered from another time period.

Definition 4. Knowledge machines are elements themselves, that look to create connections between the various

elements. They are people, research journals, books, music and everything else.

4 Switching on Knowledge Machines

In finance (Cochrane 2009), we talk about something called as a Money Machine which will get turned off, as soon

6
 Figure 1: Time Value of Money: Discounting and Compounding

as, people step in to take advantage of it. This is, also know as, Arbitrage1 (End-note 7) and it is possible when

the law of one price2 is violated3 (End-note 8). This is nothing but buying the asset that we think is cheaper than

what it should be and selling the asset that we think is more expensive than what it should be. This is based on

the price of the asset, or, the market assessment of the asset in an applicable market, as of today. When no price is

available either due to the lack of a corresponding market or participants, we can use the expectation of discounted

future cash flows.

There is a generally accepted concept in finance theory called the time value of money (Ross, Westerfield & Jaffe

2002; Brealey, Myers, Allen & Mohanty 2012; End-note 9, 10, Figure 1). This idea can be simply stated as the

fact that most people would rather have a certain sum of money now rather than the same sum of money later.

This intuitively makes sense to most people, since we are not sure whether we will receive that certain sum in the

future, due to the main uncertainties that the future holds. Though, it should be easily seen that for people that

can travel through time, money would be the same whether now or later. As unlikely or likely the possibility of

time travel might be, it is mainly being used here to illustrate further the notion of why time has different values

at different periods of time.

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Physics, provides us with a theoretical basis for moving across time, which is one of the dimensions in the physical

world we live in. We are four dimensional creatures: attitude, longitude, height and time are our dimensions since

we need to know these four co-ordinates to fully specify the position of any object in our universe. This is perhaps,

best made clear to lay audiences, with regards to physics, such as many of us, by the movie Interstellar: (see Thorne

2014). Also (Sagan 2006) has a mesmerizing account of many physical aspects, including how objects or beings can

transform between worlds that are governed by higher or lower dimensions and change their shapes or their physical

form when they enter a lower dimensional world though their shape is unchanged in the higher dimensional world.

As they move from the higher dimensions into the lower dimensions, they would need to obey the physical laws of

the lower dimension, or take the physical shape or be limited by the properties prescribed by the lower dimensional

world.

Time is our last dimension, since it is the one which, we cannot control or move around in. But we can change

the other three co-ordinates (the first three co-ordinates are the co-ordinates of space, and we can change where we

are in space) and hence we have three degrees of freedom. This points to a possibility that, beings from a higher

dimension can travel through time and enter our three dimensional world; but they would need to be limited by the

physical rules as dictated by the dimensions of our world. This also suggests that one way to enter our dimension

from a higher dimensional universe (or even a lower dimension) would be to be born in our world and likewise, the

way to leave our universe to go into a higher (or lower) dimension, might be to die. And while it might be hard to

take physical material from one universe to another. Thoughts, or knowledge, might be mobile across dimensions.

And birth (or rebirth) would be one way to travel across time. We could speculate further that the reason for this

cycle of births and deaths might be collect the most precious commodity that we can think of, which is knowledge,

since it is the only entity that gains in value as it moves across time.

Now getting back to knowledge, knowledge now or later, would still be valuable. If anything, for a time traveler,

that travels around time collecting knowledge instead of money, knowledge from different time periods would hold

more value, in comparison to money, which would have the same value at any point in time for this time traveler

(adjusting for simple things like inflation and so on).

1 If payoff A is always at least as good as payoff B, and sometimes A is better, then the price of A must be greater than the price of
B.
2 If two portfolios(assets or goods) have the same payoffs (in every state of nature), then they must have the same price.
3 A few other subtleties can arise; Arbitrage is possible when one of three conditions is met:

• The same asset does not trade at the same price on all markets ("the law of one price").
• Two assets with identical cash flows do not trade at the same price.
• An asset with a known price in the future does not today trade at its future price discounted at the risk-free interest rate (or,
the asset has significant costs of storage; as such, for example, this condition holds for grain but not for securities).

8
4.1 Notation and Terminology

• P V is the value at time = 0 (present value).

• F V is the value at time = n (future value).

• n is the number of periods (not necessarily an integer).

• i, k are the interest rate, knowledge rate at which the corresponding amount (of money or knowledge respec-

tively) compounds each period.

• g is the growth rate of money or knowledge over each time period.

For completeness, and to act as a reference point, we summarize the formula for the time value of money (more

mathematically advanced treatments can use the concept of discount functions in both discrete, or, continuous time

with exponential or hyperbolic discounting, among other possibilities, including the usage of differential equations;

End-note 11; Figure 2). The essence of the below equations, with regard to money are that, money in the future

decreases in value when it is measured in the present, or brought into the present, since the interest rate is usually

non-negative, i ≥ 0; to be precise, let us term this discounting. Likewise, money from the present, when it is to be

valued in the future, or taken into the future, increases in value; again for precision sake, let us call it compounding.
FV n
PV = n ⇐⇒ F V = P V (1 + i)
(1 + i)
n
Expressed using discount functions, which for money is less than one, f (i, n) = 1/ (1 + i) ≤ 1, we can write this

as,
PV
P V = F V f (i, n) ⇐⇒ F V =
f (i, n)

4.2 Once On, Never Off

In contrast to money, the most wonderful thing about knowledge is that if more people know about it, the more it

will be switched on. Once we become aware of a connection (either ourselves, or due to the guidance of someone

else), we generally see other links, we either put a spin on the connection, by relating it to other elements, (new

connections), or, we find other characteristics of the same connection, which by our definition can be viewed as new

9
 Figure 2: Discount Functions: Hyperbolic and Exponential

connections. Hence as more people become aware of any piece of knowledge, they add more pieces of knowledge to

it, making the overall body of knowledge grow with time.

We also consider the possibility, that new knowledge could replace old knowledge making it obsolete, but then again,

new knowledge only becomes more useful, by knowing the old connection, which shows how the new knowledge

might be better. This means, new knowledge is only useful when used together with old knowledge. If old knowledge

is forgotten or lost, new knowledge, might need to rediscover the old connections, before its value becomes enhanced.
n
Hence, the discount function for knowledge, would always be one or greater than one, h (k, n) = (1 + k) ≥ 1, stated

as the below axiom.

Axiom 1. Knowledge never decreases in value. If it decreases in value, it was never knowledge to begin with.

Instead of discount function, since by assumption knowledge never decreases in value (irrespective of whether it

moves forward or backward in time), we will use the term weight. The weights to be used can be based on the

following assumptions:

1. Past knowledge is important the older it is. That is knowledge from long ago is more valuable than knowledge

yesterday. This is because the knowledge today is built on the connections we have created or discovered in

the past. So the foundation for today is the knowledge from long ago, and the more knowledge from the past

we have the more consistent the knowledge we have today, otherwise any alternate connections from the past

could render a large body of knowledge obsolete, but then again, only by knowing this chain of connections,

10
 which though fallow, we can create better connections. So knowledge is never waster and it never loses value.

We can make a related assumption that knowledge becomes more important at an increasing rate, going back

from today (End-note 12, 13; Figure 3; when any piece of knowledge becomes most useful, its weight at that

time can be captured as the position of the center of the peak of a gaussian function, or the mean of a normal

distribution and the weight at other times could taper off similar to the normal density function: End-note

14, 15; Figure 4).

2. Future knowledge is important the closer it is to us. That is knowledge that is far away from today is

less valuable than knowledge about tomorrow. If future knowledge cannot be immediately connected to the

knowledge we have now, or at any point in time, we fail to appreciate its value. For example, if we took

the knowledge of differential equations to the past, before we had knowledge of algebra or before zero was

being used, it would be very hard to see the importance of calculus. We can make a related assumption that

knowledge becomes less important at an increasing rate, going forward from today (End-note 12, 13; Figure

3; similar to what we discussed in the point above for past knowledge, when any piece of knowledge becomes

most useful, its weight at that time can be represented as the position of the center of the peak of a gaussian

function, or the mean of a normal distribution and the weight at other times could taper off similar to the

normal density function: End-note 14, 15; Figure 4). It is, of course possible that, knowledge from different

times in the far away future, that can shed light on connections we are working with today, can become

valuable, so there can be weights for future knowledge, that have multiple regions of significant value (this is

expressed by the use of multi-modal probability distributions: End-note 16; Figure 5).

3. Certain knowledge could be useful at certain points in time, and then decays around a certain point of high

importance. We view these as impulse response functions over certain intervals of time. That is when certain

knowledge becomes extremely valuable over a certain duration of time (End-note 17; Figure 6, 7).

Theorem 1. From Axiom 1 and the weight functions (1, 2, 3) above, we get that the value of all knowledge, or

the value of any knowledge at any point in time is growing. This means the past, present and future value of every

piece of knowledge is infinity.

P V = F V h (k, n) = ∞ ⇐⇒ F V = P V h (k, n) = ∞

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Figure 3: Exponential Growth and Decay

Figure 4: Gaussian Weight Functions

12
Figure 5: Multi-Modal Weight Functions

Figure 6: Impulse Functions

13
Figure 7: Impulse Function with Linear Discontinuity

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4.3 Unintended Consequences of Journal Submissions

A glimpse, of what a journey towards the land of unintended consequences holds, can be seen, by reminding ourselves

that all knowledge creation, is but an unintended consequence. We start with an attempt, to understand the papers

written by others, (literature review of knowledge already created or experiments performed under what conditions)

and end up with papers of our own (results that add what is missing or suggest improvements). Although, to be

precise, as researchers, we do want to intentionally create new knowledge, but the exact new knowledge we end up

creating is unintentional; we stumble upon it, as we wander around the knowledge that is already in place. This

is simply because, our intentions, or what we intend, can only be catered from what we already know, or, from

existing knowledge; new knowledge, which is unknown, has to come from the realm of the unintentional.

An unwelcome but unintended consequence of all this knowledge (re?)-creation, is that perhaps, more knowledge

is being lost than what is being created. Perhaps, as someone has already said, everything has already been said,

but not by everyone and perhaps not to everyone (since we sometimes forget, things that we ourselves might have

said).

When papers such as these are being written, [the titles of these papers are quite sufficient to understand the nature

of the issues they address: (Zivney & Bertin 1992, “Publish or perish: What the competition is really doing”; (Seglen

1997), “Why the impact factor of journals should not be used for evaluating research”; (Choi 2005), “How to publish

in top journals”; (Lawrence 2003), “The politics of publication”; (De Rond & Miller 2005), “Publish or Perish: Bane

or Boon of Academic Life?”], it is a warning sign that maximum efforts are not being spent on creating the best

work, but a lot of work is spent in getting published at the top outlets. This is of course, a topic that would perhaps

determine the fate of this paper and others we plan to write developing these topics about the current selection

process at the top journals (part of this discussion is from Kashyap 2017).

Publishing in top journals is an unintended consequence, we wish to publish in a great journal, but the exact journal

we publish in, is chosen from the realm of the unintentional. There are two ways to publish in an excellent journal:

1. Publish in an excellent journal, (but this is becoming harder and harder and some would say, an almost

impossible task).

2. Publish in a good journal (and help to make it an excellent journal). Convoluted as it might seem, this might

not be that bad, since someone with less to loose, has more to gain. A journal with less reputation and impact,

can only gain more impact. We are waiting for reviewers to pounce on this point and suggest in their referee

reports that we should send this paper to lower ranked journals. This also points to the current trend in the

reviewing of knowledge created by others, where we seem to focus on nitpicking (End-note 19) and the use of

straw-man arguments (End-note 18).

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 3. If you give someone money, it is very likely that they will not turn it down. Forgetting about the point of

whether we should be giving money to rich people or to people that need it more? These “so called” top

journals that are meant to create knowledge, turn down most of the knowledge that is given to them. So

should we not be sending knowledge to where it is needed more than the top journals (unless all authors

realize this and act accordingly, we need to consider the alternate solution outlined in the next point).

4. One solution to the selection of papers by journals could perhaps be, to make an assessment of whether any

paper has a single shred of a novel idea, or innovation, or makes some contribution to knowledge. If it does,

it will grow over time and its present value will be infinity (Theorem 1). The editorial policy (for all fields)

then could be to randomly select papers based on publication limitations (journal space, reviewer load etc.)

from an overall pool of submissions, that have a single drop of knowledge (or one unique idea). The editors

and reviewers could then spend their efforts on guiding the authors to ensure a better final outcome. This

would then mean, suggesting ways to improve the manuscript instead of being too caught up on finding ways

to reject a paper.

5. This specifically tells us that the best decision we can make, with regards to the selection of articles by

journals, requires us to formulate a cutoff point, or, a region of expected future impact and randomly select

from within that region of better results. Here, we need to be mindful that the smartest of us are ill-equipped

to deal with the uncertainty in the world around us and the decisions from the best of us usually falls fall

short of being optimal. So the more conservative, we are in selecting this region, the less different the expected

future impact will be.

6. Of course, truly outstanding and well written papers can be selected without subjecting them to this lottery.

But then again, if a paper is truly outstanding and well written, it should matter less where it gets published.

So we can make the case, that all papers can be found a home based on this mechanism that relies on controlled

uncertainty.

With no offense to any of the editors and reviewers who spend countless hours finding the most suitable papers for

their journals. Would it not be easier and better to randomly select good papers from the overall pool of submissions

and coach the authors so that the papers can develop to become excellent papers? Different journals could even

collaborate to select papers from the submission pool in this way. This will perhaps also ensure that papers will

not just be judged merely by where they are published but a deeper evaluation will be done by future authors to

determine what previous work is helpful for them. It can be argued that such a thorough assessment will lead to

better fulfillment of one of the fundamental goals of research and the pursuit of knowledge, which is to promote

16
better decision making. No doubt, the problem here is not that severe since the best works do bubble up to the

surface over time and researchers are careful in selecting the works they deem beneficial for further studying or

enhancing.

The theoretical and mathematical justifications, we have provided earlier (Axiom and Theorem in section 4.2) are

mostly because most journal editors seem to require complicated mathematics, [see, Kashyap 2016, for a discussion

of whether mathematics is incomprehensibly difficult, or, whether it is beautifully simple and has been made

tremendously convoluted, unintentionally, of course], enormous amounts of data crunching, or, abstruse phrases

explaining straightforward concepts, to evaluate, and in many cases even to acknowledge, the contributions in any

paper; again an unintended consequence, Kashyap 2016 has more details; though these extra measures, act as a

certain filtering procedure for quality and are based on the very noble aspiration of ensuring, that the best knowledge

bubbles to the surface; it might be more efficient if the editors watch out for innovative, or new content and coach

the authors on the steps required to create a publication in their journal; this is illustrated with a simple example:

a hundred lessons on physics will surely be helpful; but if we substitute one physics lesson for a lesson in chemistry,

or, astronomy, that might be more enlightening, and lead to greater productivity and impact at a later stage.

4.4 Tolerating More Unintended Consequences

A further glance in the direction of unintended outcomes, might show that, in the process of creating knowledge

, and trying to understand the world better or make it a better place, we might just end up understanding one

another better, perhaps, becoming more tolerant in the process, an unintended yet very welcome consequence;

making us wonder whether, the the true purpose of all knowledge creation might be to make us more tolerant.

Continuing this chain of thoughts and since thoughts can lead to dreams, we perhaps need to sleep and many of the

answers we seek, or the knowledge we need, might be provided to us in our dreams (Dreams are currently not well

understood and there is significant research being done in this field: Foulkes 1996; Nofzinger, Mintun, Wiseman,

Kupfer & Moore 1997; Hobson, Pace-Schott & Stickgold 2000). It is said that the Universe is but the Brahma’s

(Creator’s) dream (Kashyap 2016). Research (Effort / Struggle) can help us understand this world; Sleep (Ease

/ Peace of Mind) can help us create our own world. We just need to be mindful that the most rosy and well

intentioned dreams can have unintended consequences. A message from close by and down under: We need to “Do

Some Yoga and Sleep Like A Koala” (Figure 8). We just need to be mindful that the most rosy and well intentioned

dreams can have unintended consequences (Kashyap 2016) and turn to nightmares (as it presently has become with

regards to creating and disseminating knowledge).

The other unintentional outcomes, due to having man-made furnishings, such as journal rankings labeling us, that

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 Figure 8: Sleeping Like a Koala

have arisen and distracted us from properly evaluating, the true splendor of all of nature’s creations, need to be

recognized. We have barely stopped discriminating based on race, religion, color, other dividers; we have found

new ways to differentiate, such as the ranking of the schools we have attended, the rankings of the journals we

publish in, the grades we obtain, the advanced degrees we have, the titles we confer upon ourselves both within the

corporate culture or outside, the neighborhoods we live in, and so on. The current set up of rankings and the best

ranked institutions attracting the best minds and resources, become self fulfilling prophecies that segment society,

which is one of the primary outcomes that education, and all of knowledge creation seeks to eradicate.

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5 The End Game

In the movie, Ender’s Game (based on the book of the same name Card 2010), Ender has to find a home, for

the last surviving member, of the alien race he has destroyed. End Game is the last move, (or, the final stage

of some action or process) in any game, you might play (Endnote 4; Figure 9). In the social sciences, the end

game, is perhaps, to understand the source of uncertainty, that seems to wreck havoc in our lives, but perhaps,

also makes life interesting and challenging (for financial markets, it is the source of uncertainty that causes varying

prices for financial instruments, which we wish to invest in). If we know the source of uncertainty, we might be

able to predict the future better (assuming, we cannot stop the uncertainty and that we can moderately, but not

completely, understand it, or, even influence it) and profit from it.

1. Let us illustrate with an example, say, that we are looking at the list of exam scores in the class. The scores

are sorted in some order, and you are seeing only the list of student IDs and the corresponding score. So

it is harder for you to understand, the order by which, the scores were sorted. It might seem quite random

to you. But if I told you the answer, that they are sorted by your first names, the uncertainty vanishes for

you. But since your names are not displayed in the final list, it might be hard for you to guess the source

of randomness. So, in many cases, the randomness vanishes once you know what is causing the randomness,

and there was never any randomness for me, since I was creating the randomness for you.

2. Another example could be: suppose I am moving my hand around in the air. Are you able to guess where

my hand position will be next? It is apparently random to you. But to me there is no uncertainty here, since

I can put my hand wherever I choose to. This is true, even if I myself do not know at this moment in time,

where it will be in the next moment in time. But I can decide, where to put it next, as that moment unfolds.

The randomness or uncertainty is only for the viewers of the hand, but not to me.

3. This tells us a lot about Life, Uncertainty and Unintended Consequences: since if uncertainty is eliminated,

there are, likely to be, no unintended consequences. This raises, the most important question, of all: What is

the ultimate End Game of Life? It is perhaps, to discover, the source(s) of uncertainty that unfold(s) around

us. So, Life then, just becomes, a Video Game of Uncertainty, with a lot of special effects (Sound / Pain /

Pleasure etc. etc.). And the Universe, is nothing but, an Out of the Box, Xbox Arcade ...

4. In the social sciences (and in finance), as we have discussed before, the uncertainty is simply due to the

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Figure 9: Ender’s End Game, in an Out of the Box, X-Box Arcade, also known as, Our Universe

20
 actions of everyone else participating in this business called life (and in the financial markets). This means

that predictions in perhaps, all of social sciences, are valid only for a limited amount of time and we cannot

be sure about the length of this time, since we need to constantly factor in the actions of everyone that can

potentially influence a prediction, making it an extremely hard task.

5. This also means, that the more actions from other participants that we can anticipate, the lesser will be the

uncertainty we need to contend with and the greater will be accuracy of our predictions, which will translate

to greater future benefits (or profits in the finance space).

In this present paper, we have taken a step further and looked at ways in which introducing 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. In short, we try to overcome uncertainty with uncertainty.

Such an approach, while seemingly absurd, is the ideal medicine for the even greater absurdity in the decision making

process that has become prevalent in today’s society. It takes care of the issues that crop up due to the limitations

in our understanding of complex systems, and the widely acknowledged problem that most of our measurements

are highly prone to errors.

Pondering on the sources of uncertainty and the tools we have to capture it, might lead us to believe that, either, the

level of our mathematical knowledge is not advanced enough, or, we are using the wrong methods. Many interesting

situations in life (Kashyap 2017), are caused by the uncertainty inherent in them, which we (all researchers and

society) seem to be looking to solve using logic (mathematics). This paper is meant to illustrate why perhaps

dealing with uncertainty, something twisted, requires an equally twisted approach and perhaps, solutions might not

be obtained using straight techniques that rely on precision. The dichotomy between logic and randomness is a

topic worth pursuing on many fronts. Our innovation is one possible alternative methodology, succinctly expressed

as, “Fighting Uncertainty with Uncertainty”.

This technique is suitable for the social sciences since the primary source of uncertainty are the members of the

system themselves and presently, no methods are known to fully determine the outcomes in such an environment,

which perhaps, would require being able to read the minds of everyone involved and to anticipate their actions

continuously. Admittedly, we are not qualified to recommend whether such an approach is conducive for the

natural sciences, unless perhaps, bounds can be established on the levels of uncertainty in a system and it is shown

that a better understanding of the system and hence improved decision making will not alter the outcomes. Barring

such a bound on the level of uncertainty it is advisable to understand the sources that cause arbitrary outcomes

and follow more traditional methods.

The central innovation can be understood as optimizing to get an interval of satisfactory performance and random-

21
izing over that interval. The goal is not just to optimize, but to identify a region of acceptable performance and

set the parameters of a probability distribution over that region, and sample from it to provide an agreeable level

of performance. Agents looking to optimize will randomize over an optimal region, hence this approach is called

"Randoptimization". Due to measurement errors and other uncertainty, we can never be certain of any optimization

we perform, rather it is better to randomize over acceptable states.

The example we have developed in greater detail is the submission of papers to journals with impact uncertainty.

The theorem, which is a new result shows that, any paper, that has a single innovative idea should be accepted and

the editors (more importantly reviewers should work with the authors to develop it further). Other, where such an

approach might be helpful, with the common prescription, “Don’t Simply Optimize, Also Randomize; perhaps best

described by the term - Randoptimization” are considered in (Kashyap 2017) and repeated below for completeness.

1. News-vendor Inventory Management Problem.

2. School Admissions.

3. Journal Submissions.

4. Job Candidate Selection.

5. Stock Picking.

6. Monetary Policy

Success is, a very relative term. In the extreme case, which, we study a bit about in finance, one person’s success

(profit) could be someone else’s failure (loss). That being said, to triumph in creating a valuation for knowledge

and almost everything else, it is important to know where we are, and start the journey towards, where we want

to be. An unintended consequence of taking the first step on a journey, means that the percentage of the distance

left to be traveled reduces from infinity to a finite number. So once we start the trip, it becomes manageable

immediately. The subjectivity in how we compare things (assumption 1) means that the benchmark for knowledge

valuation might be constantly changing, which means we need to keep on learning.

The dynamic nature of any social-science system, where changes can be observed and decisions can be made by

participants to influence the system, means that the limited predictive ability of any awareness will necessitate

periodic reviews and the prescription of corrective programs. It would be interesting to see how participants modify

their actions once randomness is introduced in the decision making process. Where there is uncertainty, there will

be unintended consequences, which might be welcome or hazardous (Kashyap 2016). Of interest would be to see

22
whether such an approach will reduce the sense of entitlement prevalent in society or whether it would lead to

greater complacency.

Our only hope is that this paper represents the first step towards a formal mechanism for putting the value on

something, which we deem valuable, but fail to recognize it in most places we see it (as evidenced by referee reports,

which are mostly filled with trivial straw-man arguments or nitpicking the weakest points of a paper; surely we

need to educate all people, including the so called experts in their domains, that one reason, why such unwanted

outcomes creep up, is because, we live in a world that requires around 2000 IQ points, to consistently make correct

decisions; but the smartest of us has only a fraction of that; End-note 20. Hence, we need to rise, above the urge to

ridicule, the seemingly obvious blunders of others, since without those marvelous mistakes, the path ahead will not

become clearer for us). Just because we do not see a connection, does not mean, that there is no connection (Newton

discovered gravity, which has existed since time immemorial, only when an apple fell on his head. Though the truth

behind this myth can be debated, the metaphor is relevant for us, since we sometimes, only notice things that hit

us: End-note 21; McKie & De Beer 1951; Fara 1999). We need to try harder and be more open to acknowledging

the smallest piece of new knowledge that might have been brought to light by anyone (knowledge is synonymous

to light in many cultures across the world; for someone that is able to differentiate between darkness and light, a

single ray of light can be the greatest ally in keeping hope alive; End-note 22).

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