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Judith Curry: Can We Make Good Decisions Under Ignorance?

Does decision making require high levels of confidence? Can there be such a thing as making good decisions under deep uncertainty and even ignorance?   What decision making criteria or guidelines make sense under these circumstances? How does overconfidence hamper the decision making process?

Smithson’s blog Ignorance and Uncertainty has an excellent post entitled “Can we make good decisions under ignorance?” Some excerpts:

Here is a simplified list of criteria for “good” (i.e., rational) decisions under risk:

  1. Your decision should be based on your current assets.
  2. Your decision should be based on the possible consequences of all possible outcomes.
  3. You must be able to rank all of the consequences in order of preference and assign a probability to each possible outcome.
  4. Your choice should maximize your expected utility, or roughly speaking, the likelihood of those outcomes that yield highly preferred consequences.

In non-trivial decisions, this prescription requires a vast amount of knowledge, computation, and time. In many situations at least one of these requirements isn’t met, and often none of them are.

With regards to the climate change issue, I have argued that we do not have sufficient information for #2 and #3.  Steve Schneider argued that we should provide the decision makers with pdfs anyways, since they will create their own as part of the decision making process.

I have argued that the pdfs are highly uncertainty and misleading for decision makers.  Does the lack of probabilities for particular outcomes mean that the situation is too uncertain to make any decision at all?   Not at all.  The climate change problem is well categorized by “decision making under deep uncertainty.”

Roger Kasperson contributed a chapter on “coping with deep uncertainty” to Gabriele Bammer’s and my 2008 book. By “deep uncertainty” he means “situations in which, typically, the phenomena… are characterized by high levels of ignorance and are still only poorly understood scientifically, and where modelling and subjective judgments must substitute extensively for estimates based upon experience with actual events and outcomes, or ethical rules must be formulated to substitute for risk-based decisions.” His list of options open to decision makers confronted with deep uncertainty includes the following:

  1. Delay to gather more information and conduct more studies in the hope of reducing uncertainty across a spectrum of risk;
  2. Interrelate risk and uncertainty to target critical uncertainties for priority further analysis, and compare technology and development options to determine whether clearly preferable options exist for proceeding;
  3. Enlarge the knowledge base for decisions through lateral thinking and broader perspective;
  4. Invoke the precautionary principle;
  5. Use an adaptive management approach; and
  6. Build a resilient society.

He doesn’t recommend these unconditionally, but instead writes thoughtfully about their respective strengths and weaknesses. Kasperson also observes that “The greater the uncertainty, the greater the need for social trust… The combination of deep uncertainty and high social distrust is often a recipe for conflict and stalemate.”

Again, we see the fruits of Climategate (conflict and stalemate), which generated high social distrust for climate science and the IPCC.

[P]olitical economist Charles Lindblom emerged as an early proponent of various kinds of “incrementalism,” which he engagingly called “muddling through.”  [He] ventured beyond the bounded rationality camp in four important respects. First, he brought into focus the prospect that we may not have knowable preferences. Second, he realized that means and ends may not be separable and may be reshaped in the very process of making a decision. Third, he mooted the criteria of choosing incremental and corrigible changes over large and irreversible ones. Fourth, he observed that many decisions are embedded in institutional or social contexts that may be harnessed to enhance decision making. All four of these advances suggest implications for decision making under ignorance.

“Muddling through” aptly characterizes what is going on in U.S. climate and energy policy, anyways.

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