A priori definition
/What is A Priori?
A priori indicates a judgment or conclusion reached without any basis in actual experience. Such judgments are considered to be ones where the truth is so self-evident that there is no point in obtaining actual evidence to support the conclusion reached. Thus, reasoning should be sufficient to arrive at a conclusion, without the need for physical evidence to bolster it. Another way of looking at the a priori concept is to arrive at a conclusion regarding a specific situation, based on a general concept or theory.
Disadvantages of A Priori Reasoning
A priori decision making can be dangerous when used repeatedly, since the probability will rise over time that a "self evident" decision reached without any supporting experimentation is actually an incorrect decision. Thus, errors are more likely to arise in complex decision environments, where a more quantitative approach to decision making is warranted.
Example of A Priori in Business
Here are several examples of a priori reasoning as used within a business environment:
Financial analysis. A company creates three budgets, which it designates as worst case, most likely, and best case. An a priori conclusion would be that, absent an experiment, the business is equally likely to experience all three scenarios, which means that you would assign a 33% probability to each one.
Capital allocations. Opportunity cost is the understanding that resources, such as time and money, are limited and that choosing one action typically means forgoing another. This concept does not require empirical evidence to validate; it is understood logically. If a company chooses to invest capital in Project A, it inherently sacrifices the potential returns from Project B (the next-best alternative use of that capital).
Similar Terms
A priori is similar to deductive reasoning.