What’s the Worst Case? The Methodology of Possibilistic Prediction

Abstract

Frank Knight (1921) famously distinguished the epistemic modes of certainty, risk, and uncertainty in order to characterize situations where deterministic, probabilistic or possibilistic foreknowledge is available. Because our probabilistic knowledge is limited, i.e. because many systems, e.g. the global climate, cannot be described and predicted probabilistically in a reliable way, Knight’s third category, possibilistic foreknowledge, is not simply swept by the probabilistic mode. This raises the question how to justify possibilistic predictions-including the identification of the worst case. The development of such a modal methodology is particularly vital with respect to predictions of climate change. I show that a methodological dilemma emerges when possibilistic predictions are framed in traditional terms and argue that a more nuanced conceptual framework, distinguishing different types of possibility, should be used in order to convey our uncertain knowledge about the future. The new conceptual scheme, however, questions the applicability of standard rules of rational decision-making, thus generating new challenges.