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A General, Analytic Method for Generating Robust Strategies and Narrative Scenarios

RAND Corporation, 1776 Main Street, P.O. Box 2138, Santa Monica, California 90407
RAND Corporation, 1776 Main Street, P.O. Box 2138, Santa Monica, California 90407
RAND Corporation, 1776 Main Street, P.O. Box 2138, Santa Monica, California 90407
RAND Corporation, 1776 Main Street, P.O. Box 2138, Santa Monica, California 90407
lempert{at}rand.org
david.groves{at}gmail.com
swpopper{at}rand.org
bankes{at}rand.org

Robustness is a key criterion for evaluating alternative decisions under conditions of deep uncertainty. However, no systematic, general approach exists for finding robust strategies using the broad range of models and data often available to decision makers. This study demonstrates robust decision making (RDM), an analytic method that helps design robust strategies through an iterative process that first suggests candidate robust strategies, identifies clusters of future states of the world to which they are vulnerable, and then evaluates the trade-offs in hedging against these vulnerabilities. This approach can help decision makers design robust strategies while also systematically generating clusters of key futures interpretable as narrative scenarios. Our study demonstrates the approach by identifying robust, adaptive, near-term pollution-control strategies to help ensure economic growth and environmental quality throughout the 21st century.

Key Words: decision making under uncertainty; robust decision making; deep uncertainty; adaptive planning; scenario planning
History: Received: May 6, 2004;