DECISION-MAKING WHEEL

This is not quite true. There is an equilibrium in which all firms use a randomizing device to decide how much lo spetxl on research and development. The problem, as explained in chapter XI, is that the equilibrium 1 highly unstable. Empirically, we do not observe firms using lottery wheels or dice to make their investment decisions. 

It is possible to invoke examples about the way the human brain works and from IT to illustrate that Zen and existentialism (see below) have an essentially scientific and biological justification. Consider this. Non-automobile drivers can substitute travel by subway train, walk routine, or other forms of transport to work. Drivers making their daily trips to work often barely remember the journey. Weren t they paying attention Wasn t that dangerous Consider first that these drivers must have made many intricate decisions, and performed many complicated operations, successfully. They switched lanes in a complex maneuvers and slowed down to let pedestrians stroll across roads. To perform such tasks many times a week, we take them in our stride, or we should say behind the wheel. Consider that if the unexpected had occurred, the driver would have quickly become alert and dealt with it soon enough. However, if the driver had been paying attention to every minute detail, that definitely would have made the trip dangerous, as this is exactly what happens the first time that we ever drive. 

Individuals are also not entirely logical in the way in which they make decisions. The value assigned to particular outcomes, such as amount of effort saved, money earned, approval obtained or withheld by colleagues and superiors, etc. is a subjective one. It will be influenced by the personality of the individual making the decision, and by experience of the way in which previous decisions have turned out. Small probabilities are consistently poorly assessed and people rely upon such illogical factors as luck, which they believe they can influence, rather than accepting that some things such as roulette wheels or dice are entirely random machines. 

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