Structural UnpredictabilitySimulation I of III
Simulation I · Strategic Reasoning
The Conserved Regress
Guess a number from 0 to 100. The winner is whoever lands closest to two-thirds of the average of all guesses. The perfectly rational answer is zero. It almost never wins. Watch why.
The decision in this simulation
You’re watching
A room of people each guess a number, trying to land near ⅔ of the average.
It stands for
Anyone betting on what a crowd will do — voters, shoppers, investors all guessing about each other.
Why it matters
The winning number is set by how many steps of “what will others guess?” people bother to take — a depth no one can see. Pure logic loses.
0255075100
Crowd average
29.5
⅔ of average (winning number)
19.7
“Rational” Nash answer
0.0
Resolving the crowd…
The point
Rationality alone doesn’t determine what people do. What determines it is belief about others’ beliefs — a regress that real minds cut short somewhere unpredictable. Add more reasoning power and the regress doesn’t close; it just moves up a level. The indeterminacy is conserved.
The research behind this
Strategic Entrepreneurship Journal · 2024Chance, Probability & Uncertainty at the Edge of Human ReasoningWhere calculable risk ends and genuine unknowability begins — the boundary the regress lives on.
Academy of Management Annals · 2018Uncertainty, Knowledge Problems & Entrepreneurial ActionThe foundational anatomy of the knowledge problems that make behavior hard to forecast.
Journal of Business Venturing · 2024Non-Probabilistic Reasoning in Navigating Entrepreneurial UncertaintyHow people reason when no calculation can reach the answer — neither pure intuition nor pure logic.