Politicians, board members and doctors, but also traders, are decision-makers.
They have to choose, ongoing, even while facing conflicts of interest and dilemmas. This requires that one dares to choose. In its turn, making a decision requires analysis, including the comparing and weighing of alternatives.
Besides, there is a difference between wicked and tame problems. Tame problems can be solved in a linear process of identifying and defining the problem, collecting data, forecasting by a model, choosing tools, performing analysis, finding a way to handle and implementing it. With a tame problem, the solution can be separated from its implementation. However, if it concerns a wicked problem that has to be dealt with, a different process has to be applied. Social problems are almost always wicked, so that the linear way of solving problems does not work. Social problems appear in social complex systems, like the commodity and energy markets. Wicked problems are characterised by the inescapable lack of knowledge.
Examples of typical wicked problems in the commodity and energy markets, congestion in the electricity grid, climate change, and security of supply for food and energy. More generally speaking, any crisis concerns a wicked problem.
The use of quantitative methods, machine learning, and big data analytics can help in identifying patterns, trends, and potential future movements in complex systems. These tools can process and analyse vast amounts of data at speeds and scales beyond human capability, providing insights that can inform decision-making.
Collaborating with other participants and stakeholders within the financial ecosystem can provide diverse perspectives and insights, enhancing the ability to navigate complexity. Knowledge sharing through professional networks, forums, and publications can also contribute to a deeper understanding of complex market phenomena.
Ethical decision-making and transparency are crucial in maintaining trust and credibility, particularly in times of uncertainty. Clear communication with stakeholders about risks, uncertainties, and strategies for managing them can help in navigating complex social systems more effectively.