Book: Decision Making Under Deep Uncertainty

Author

Vincent A. W. J. Marchau, Warren E. Walker, Pieter J. T. M. Bloemen, Steven W. Popper

Summary

A review of methods and applications for decision making under deep uncertainty.

Takeaways

Situations with deep uncertainty are characterized by a lack of knowledge about how future events will unfold. In complex systems, the predictability of potential outcomes is low.

When confronted with deep uncertainty, decision makers are advised to shift from a predict-then-act paradigm to a monitor-and-adapt strategy. Traditional planning approaches make assumptions, predict outcomes, and tailor a policy to the predictions. Decision Making Under Deep Uncertainty (DMUDU) approaches, on the other hand, propose a policy, identify vulnerabilities, and assess the best options for reducing the identified vulnerabilities.

Quotes

“The intrinsic limits to predictability, the existence of legitimate alternative interpretations of the same data, and the limits to knowability of a system have important implications for decisionmaking. Under the label of ‘decisionmaking under deep uncertainty’, these are now being explored."

“There is ample evidence that human reasoning with respect to complex uncertain systems is intrinsically insufficient. Often, mental models are event based, have an open-loop view of causality, ignore feedback, fail to account for time delays, and are insensitive to nonlinearity (Sterman 1994)."

“That is, under deep uncertainty decision support should move away from trying to define what is the right choice and instead aim at enabling deliberation and joint sense making among the various parties to a decision."

“In short, there are five categories of components: policy architecture, generation of scenarios, generation of alternatives, definition of robustness, and vulnerability analysis. Any given DMDU approach makes choices with respect to these five categories. For some, these choices are primarily or almost exclusively in one category while remaining silent on the others. For others, implicit or explicit choices are made with respect to each category."