Skip to main content Download This Paper Open PDF in Browser Add Paper to My Library Share: Permalink Using these links will ensure access to this page indefinitely Copy URL Copy DOI Theory Is All You Need: AI, Human Cognition, and Causal Reasoning Strategy Science, volume 9, issue 4, 2024[ 10.1287/stsc.2024.0189 ] 26 Pages Posted: 4 Apr 2024 Last revised: 14 Oct 2025 See all articles by Teppo Felin Teppo Felin University of Utah; University of Oxford - Said Business School Matthias Holweg University of Oxford - Said Business School Date Written: February 24, 2024 Abstract Scholars argue that artificial intelligence (AI) can generate genuine novelty and new knowledge and, in turn, that AI and computational models of cognition will replace human decision making under uncertainty. We disagree. We argue that AI’s data-based prediction is different from human theory-based causal logic and reasoning. We highlight problems with the decades-old analogy between computers and minds as input–output devices, using large language models as an example. Human cognition is better conceptualized as a form of theory-based causal reasoning rather than AI’s emphasis on information processing and data-based prediction. AI uses a probability-based approach to knowledge and is largely backward looking and imitative, whereas human cognition is forward-looking and capable of generating genuine novelty. We introduce the idea of data–belief asymmetries to highlight the difference between AI and human cognition, using the example of heavier-than-air flight to illustrate our arguments. Theory-based causal reasoning provides a cognitive mechanism for humans to intervene in the world and to engage in directed experimentation to generate new data. Throughout the article, we discuss the implications of our argument for understanding the origins of novelty, new knowledge, and decision making under uncertainty. Keywords: cognition, artificial intelligence, information processing, prediction, decisions, strategy, theory-based view Suggested Citation: Suggested Citation Felin, Teppo and Holweg, Matthias, Theory Is All You Need: AI, Human Cognition, and Causal Reasoning (February 24, 2024). Strategy Science, volume 9, issue 4, 2024[ 10.1287/stsc.2024.0189 ], Available at SSRN: https://ssrn.com/abstract=4737265 or http://dx.doi.org/10.1287/stsc.2024.0189 Teppo Felin (Contact Author) University of Utah ( email ) 1645 E. Campus Center Salt Lake City, UT 84112 United States University of Oxford - Said Business School ( email ) Park End Street Oxford, OX1 1HP Great Britain HOME PAGE: http://sites.google.com/site/teppofelin2/ Matthias Holweg University of Oxford - Said Business School ( email ) Park End Street Oxford, OX1 1HP Great Britain HOME PAGE: http://https://www.sbs.ox.ac.uk/about-us/people/matthias-holweg Download This Paper Open PDF in Browser Do you have a job opening that you would like to promote on SSRN? Place Job Opening Paper statistics Downloads 12,505 Abstract Views 33,122 Rank 903 1 Citations 208 References PlumX Metrics Related eJournals Cognition in Mathematics, Science, & Technology eJournal Follow Cognition in Mathematics, Science, & Technology eJournal Subscribe to this fee journal for more curated articles on this topic FOLLOWERS 613 PAPERS 2,330 This Journal is curated by: Mark B. Turner at Case Western Reserve University - Department of Cognitive Science Artificial Intelligence eJournal Follow Artificial Intelligence eJournal Subscribe to this fee journal for more curated articles on this topic FOLLOWERS 359 PAPERS 38,267 Feedback Feedback to SSRN Feedback (required) Email (required) Submit Submit a Paper Section 508 Text Only Pages SSRN Quick Links SSRN Solutions Research Paper Series Conference Papers Partners in Publishing Jobs & Announcements Special Topic Hubs SSRN Rankings Top Papers Top Authors Top Organizations About SSRN Network Directors Announcements Contact us FAQs Copyright Terms and Conditions Privacy Policy All content on this site: Copyright © 2024 Elsevier Inc., its licensors, and contributors. All rights are reserved, including those for text and data mining, AI training, and similar technologies. For all open access content, the relevant licensing terms apply. We use cookies to help provide and enhance our service and tailor content. To learn more, visit Cookie Settings . This page was processed by aws-apollo-l200 in 0.086 seconds