Speculation

Models of Speculative Reasoning

Despite the heavy emphasis Western cultures place upon logical operations, a high percentage of human decisions are carried out based upon intuition, emotion, experiential knowledge—all of which factor into processes of speculation. Procedures to simplify decision-making in the face of risk and uncertainty have been developing since the Dark Ages.

When there are multiple options, uncertainty of outcomes produces affective disturbance in proportion to the level of emotional investment in a hoped-for outcome; the more choices, the more emotionally loaded the decision and sense of risk becomes. Difficult outcomes for certain situations that tend to recur in human experience include the Hobson’s choice (one option, no alternatives: “Take the horse nearest the stable door or walk”); Morton’s fork paradox (two options which seem opposed have the same, usually unpleasant, end: “If she is a witch, she will float and face execution; if she isn’t, she will drown”); Sophie’s choice (several options, all having undesirable outcomes); Procrustean bed (where all options are tied to a single set of arbitrary data which may be violently enforced); and double-bind situations (discursively constructed dilemmas framed to preclude any workable response, such as “Are you still lying?”).

Attempts to reduce risk and uncertainty in decision-making produced early strategies for more accurate speculation. The Franciscan friar William of Ockham, a 14th-century logician, prescribed that one should apply empirical evidence to theory. If several similar theories are offered, one should select the simplest, that is, one that makes the fewest assumptions. Thus, Ockham’s razor will shave away extraneous material, leaving the “elegant solution.”

The relationship between gambling and risk management is obvious; however, the ability to mathematically speculate upon outcomes was first documented in 1550 when Italian mathematician-physician Girolamo Cardano attempted to calculate the odds of a pair of dice rolling a double-six. In the 17th century, French mathematician-philosopher Blaise Pascal and number theorist Pierre de Fermat also addressed the “problem of points” first posed by the Franciscan monk Luca Pacioli in the late 15th century. The question centers on a hypothetical game of chance which is interrupted with stakes still on the table; the problem is how to divide the pot fairly. Pascal’s and Fermat’s calculations were foundational for probability theory.

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