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Robust decision-making

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uncertainty about the future, and then uses this characterization to rank the desirability of alternative decision options. Importantly, this approach characterizes uncertainty without reference to the alternative options. In contrast, RDM characterizes uncertainty in the context of a particular decision. That is, the method identifies those combinations of uncertainties most important to the choice among alternative options and describes the set of beliefs about the uncertain state of the world that are consistent with choosing one option over another. This ordering provides cognitive benefits in decision support applications, allowing stakeholders to understand the key assumptions underlying alternative options before committing themselves to believing those assumptions.
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is judged successful from those where it is judged unsuccessful. Statistical or data-mining algorithms are applied to the database to generate simple descriptions of regions in the space of uncertain input parameters to the model that best describe the cases where the strategy is unsuccessful. That is, the algorithm for describing these cases is tuned to optimize both the predictability and interpretability by decision-makers. The resulting clusters have many characteristics of scenarios and can be used to help decision-makers understand the vulnerabilities of the proposed policies and potential response options. A review conducted by the
251:. OpenMORDM is an open source R package for RDM that includes support for defining more than one performance objective. OpenMORDM facilitates exploring the impact of different robustness criteria, including both regret-based (e.g., minimizing deviation in performance) and satisficing-based (e.g., satisfying performance constraints) criteria. Rhodium is an open source Python package that supports similar functionality to the EMA Workbench and to OpenMORDM, but also allows its application on models written in C, C++, Fortran, R and Excel, as well as the use of several multi-objective evolutionary algorithms. 196:
uncertain input parameters to the model(s), collecting the runs in a large database of cases, and analyzing this database to determine what policy-relevant statements can be supported. RDM represents a particular implementation of this concept. An RDM analysis typically creates a large database of simulation model results, and then uses this database to identify vulnerabilities of proposed strategies and the tradeoffs among potential responses. This analytic process provides several practical advantages:
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used traditional sequential decision approaches, rule-based descriptions of adaptive strategies, real options representations, complicated optimal economic growth models, spreadsheet models, agent-based models, and organization's existing suites of simulation models such as one used by the U.S. government to forecast the future state of the social security trust fund.
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renewable energy requirements, a comparison of long-term energy strategies for the government of Israel, an assessment of science and technology policies the government of South Korea might pursue in response to increasing economic competition from China, and an analysis of Congress' options for reauthorizing the
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as a criterion to assess alternative policies. The traditional subjective utility framework ranks alternative decision options contingent on best estimated probability distributions. In general, there is a best (i.e., highest ranked) option. RDM analyses have employed several different definitions of
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RDM approaches have been applied to a wide range of different types of decision challenges. A study in 1996 addressed adaptive strategies for reducing greenhouse gas emissions. More recent studies include a variety of applications to water management issues, evaluation of the impacts of proposed U.S.
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Robust decision making describes a variety of approaches that differ from traditional optimum expected utility analysis in that they characterize uncertainty with multiple representations of the future rather than a single set of probability distributions and use robustness, rather than optimality,
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to facilitate the identification of vulnerabilities of proposed strategies. The process begins by specifying some performance metric, such as the total cost of a policy or its deviation from optimality (regret), which can be used to distinguish those cases in the results database where the strategy
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framework that aims to help identify potential robust strategies, characterize the vulnerabilities of such strategies, and evaluate the tradeoffs among them. RDM focuses on informing decisions under conditions of what is called "deep uncertainty", that is, conditions where the parties to a decision
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The exploratory modeling concept makes it possible to use a wide variety of decision approaches using diverse types simulation models within a common analytic framework (depending on what seems most appropriate for a particular decision application). Within this common framework RDM analyses have
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Robust decision methods seem most appropriate under three conditions: when the uncertainty is deep as opposed to well characterized, when there is a rich set of decision options, and the decision challenge is sufficiently complex that decision-makers need simulation models to trace the potential
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approach, with computer simulations used not as a device for prediction, but rather as a means for relating a set of assumptions to their implied consequences. The analyst draws useful information from such simulations by running them many times using an appropriate experimental design over the
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The database of cases simplifies the comparison of alternative decision frameworks because one can apply these frameworks to an identical set of model results. For instance, one can place a joint probability distribution across the cases in a database, conduct an expected utility analysis, and
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of the rather sparse literature evaluating how scenarios actually perform in practice when used by organizations to inform decisions identified several key weaknesses of traditional scenario approaches. Scenario-discovery methods are designed to address these weaknesses. In addition, scenario
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If the uncertainty is deep and a rich set of options is available, traditional qualitative scenario methods may prove most effective if the system is sufficiently simple or well understood that decision-makers can accurately connect potential actions to their consequences without the aid of
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When the uncertainty is well characterized, then traditional expected utility (predict-then-act) analyses are often most appropriate. In addition, if decision-makers lack a rich set of decision options they may have little opportunity to develop a robust strategy and can do no better than a
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Running a simulation multiple times in the forward direction can simplify the analytic challenge of representing adaptive strategies in many practical applications because it separates the running of the simulation from the analysis needed to evaluate alternative decision options using the
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analysis framework to characterize uncertainty and to help identify and evaluate robust strategies. This structuring of the decision problem is a key feature of RDM. The traditional decision analytic approach follows what has been called a predict-then-act approach that first characterizes
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RDM rests on three key concepts that differentiate it from the traditional subjective expected utility decision framework: multiple views of the future, a robustness criterion, and reversing the order of traditional decision analysis by conducting an iterative process based on a
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robustness. These include: trading a small amount of optimum performance for less sensitivity to broken assumptions, good performance compared to the alternatives over a wide range of plausible scenarios, and keeping options open. All incorporate some type of
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RDM is not a recipe of analytic steps, but rather a set of methods that can be combined in varying ways for specific decisions to implement the concept. Two key items in this toolkit are described below: exploratory modeling and scenario discovery.
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discovery supports analysis for multiple stressors because it characterizes vulnerabilities as combinations of very different types of uncertain parameters (e.g. climate, economic, organizational capabilities, etc.).
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A wide variety of concepts, methods, and tools have been developed to address decision challenges that confront a large degree of uncertainty. One source of the name "robust decision" was the field of
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Dessai, Suraje; Hulme, Mike (February 2007). "Assessing the robustness of adaptation decisions to climate change uncertainties: A case study on water resources management in the East of England".
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Robust decision making is more analytical than intuitive. It adopts a systematic approach to remove uncertainty within the resources available to make safe and effective decisions. (1023)
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Lempert, Robert J.; Nakicenovic, Nebojsa; Sarewitz, Daniel; Schlesinger, Michael (July 2004). "Characterizing climate-change uncertainties for decision-makers: an editorial essay".
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represents the best description of a deeply uncertain future. Rather RDM uses ranges or, more formally, sets of plausible probability distributions to describe deep uncertainty.
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Lempert, Robert J.; Schlesinger, Michael E.; Bankes, Steve C. (June 1996). "When we don't know the costs or the benefits: adaptive strategies for abating climate change".
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in the 1980s and early 1990s. Jonathan Rosenhead and colleagues were among the first to lay out a systematic decision framework for robust decisions, in their 1989 book
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Lempert, Robert J.; Collins, Myles T. (August 2007). "Managing the risk of uncertain threshold responses: comparison of robust, optimum, and precautionary approaches".
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criteria and, in contrast to expected utility approaches, all generally describe tradeoffs rather than provide a strict ranking of alternative options.
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Bryant, Benjamin P.; Lempert, Robert J. (January 2010). "Thinking inside the box: a participatory, computer-assisted approach to scenario discovery".
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Robust decision-making (RDM) is a particular set of methods and tools developed over the last decade, primarily by researchers associated with the
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Kwakkel, Jan H.; Pruyt, Erik (March 2013). "Exploratory Modeling and Analysis, an approach for model-based foresight under deep uncertainty".
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There is several software available to perform RDM analysis. RAND Corporation has developed CARS for exploratory modeling and the sdtoolkit
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Weaver, Christopher P.; Lempert, Robert J.; Brown, Casey; Hall, John A.; Revell, David; Sarewitz, Daniel (January 2013).
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Rational analysis for a problematic world revisited: problem structuring methods for complexity, uncertainty and conflict
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simulation. In contrast, some optimization methods make it difficult to include many types of feedbacks in a simulation.
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While often used by researchers to evaluate alternative options, RDM is designed and is often employed as a method for
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Groves, David G.; Lempert, Robert J. (February 2007). "A new analytic method for finding policy-relevant scenarios".
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The database of cases provides a concrete representation of the concept of a multiplicity of plausible futures.
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Making robust decisions: decision management for technical, business, and service teams
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vulnerability-and-response-option rather than a predict-then-act decision framework.
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Hadjimichael, Antonia; Gold, David; Hadka, David; Reed, Patrick (9 June 2020).
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Groves, David G.; Davis, Martha; Wilkinson, Robert; Lempert, Robert J. (2008).
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Hadka, David; Herman, Jonathan; Reed, Patrick; Keller, Klaus (December 2015).
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Third Assessment Report of the Intergovernmental Panel on Climate Change
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Differences between RDM and traditional expected-utility analysis
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package for scenario discovery. The EMA Workbench, developed at
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compare the results to an RDM analysis using the same database.
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High-performance government: structure, leadership, incentives
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consequences of their actions over many plausible scenarios.
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distributions for the key input parameters to those models.
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Mahmoudi, Amin; Abbasi, Mehdi; Deng, Xiaopeng (2022).
70:. Similar themes have emerged from the literatures on 935: 793: 791: 789: 348: 346: 344: 342: 561:"High-performance government in an uncertain world" 563:. In Klitgaard, Robert E.; Light, Paul C. (eds.). 522:Mingers, John; Rosenhead, Jonathan, eds. (2001) . 288: 786: 339: 1027: 521: 723:Wiley Interdisciplinary Reviews: Climate Change 559:Lempert, Robert J.; Popper, Steven W. (2005). 352: 869: 797: 558: 906: 910:Technological Forecasting and Social Change 801:Technological Forecasting and Social Change 684: 404:"A universal model of diagnostic reasoning" 221:RDM analyses often employ a process called 829:"Exploratory modeling for policy analysis" 526:(2nd ed.). Chichester, UK; New York: 129:First, RDM characterizes uncertainty with 1007:, an "exploratory modeling workbench" by 986: 953: 846: 627: 421: 401: 322: 178:Analytic tools for robust decision-making 68:Rational Analysis for a Problematic World 46:relating actions to consequences or the 450:Quality engineering using robust design 186: 14: 1028: 942:Environmental Modelling & Software 826: 484: 447: 216: 161:Conditions for robust decision-making 27:Iterative decision analytic framework 390:as a decision criterion. (1011-1012) 84:info-gap decision theory and methods 234: 42:do not know or do not agree on the 24: 772:10.1023/B:CLIM.0000037561.75281.b3 25: 1052: 998: 975:Journal of Open Research Software 154:vulnerability-and-response-option 142:robustness rather than optimality 448:Phadke, Madhav Shridhar (1989). 369:10.1111/j.1539-6924.2007.00940.x 295:Expert Systems with Applications 962: 929: 900: 886:10.1016/j.gloenvcha.2006.11.006 863: 820: 749: 707: 701:10.1016/j.gloenvcha.2006.11.005 678: 1009:Delft University of Technology 923:10.1016/j.techfore.2012.10.005 814:10.1016/j.techfore.2009.08.002 652: 597: 552: 515: 478: 441: 402:Croskerry, Pat (August 2009). 395: 282: 245:Delft University of Technology 135:joint probability distribution 93: 13: 1: 955:10.1016/j.envsoft.2015.07.014 276: 423:10.1097/ACM.0b013e3181ace703 131:multiple views of the future 115:Terrorism Risk Insurance Act 7: 1041:Problem structuring methods 873:Global Environmental Change 827:Bankes, Steve (June 1993). 688:Global Environmental Change 266:Problem structuring methods 254: 228:European Environment Agency 170:predict-then-act analysis. 10: 1057: 307:10.1016/j.eswa.2021.116067 53: 485:Ullman, David G. (2006). 191:Many RDM analyses use an 62:popularized primarily by 1036:Decision support systems 452:. Englewood Cliffs, NJ: 668:Water Resources IMPACT 31:Robust decision-making 848:10.1287/opre.41.3.435 528:John Wiley & Sons 152:Third, RDM employs a 90:, published in 2001. 80:imprecise probability 567:. Santa Monica, CA: 193:exploratory modeling 187:Exploratory modeling 834:Operations Research 620:1996ClCh...33..235L 491:Trafford Publishing 174:simulation models. 638:10.1007/BF00140248 223:scenario discovery 217:Scenario discovery 39:decision analytics 37:) is an iterative 409:Academic Medicine 140:Second, RDM uses 72:scenario planning 48:prior probability 16:(Redirected from 1048: 993: 992: 990: 988:10.5334/jors.293 966: 960: 959: 957: 933: 927: 926: 904: 898: 897: 867: 861: 860: 850: 824: 818: 817: 795: 784: 783: 753: 747: 746: 720: 711: 705: 704: 682: 676: 675: 665: 656: 650: 649: 631: 601: 595: 594: 569:RAND Corporation 556: 550: 549: 519: 513: 512: 489:. 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Index

Robust decision
decision analytics
system models
prior probability
robust design
Genichi Taguchi
scenario planning
robust control
imprecise probability
info-gap decision theory and methods
Third Assessment Report of the Intergovernmental Panel on Climate Change
RAND Corporation
decision support
Terrorism Risk Insurance Act
joint probability distribution
satisficing
European Environment Agency
R
Delft University of Technology
Python
Design rationale
Problem structuring methods
System dynamics
"A novel project portfolio selection framework towards organizational resilience: Robust Ordinal Priority Approach"
doi
10.1016/j.eswa.2021.116067
ISSN
0957-4174
PMC
9928571

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