Decision analysis under uncertainty
Decision analysis under uncertainty provides structured methods for choosing among options when outcomes are uncertain and objectives conflict. It makes trade-offs and value judgements explicit. Systemic Risk Management stewards this page for the Nexus Consortium.
- 01In briefThe short answer
- 02The methodWhat decision analysis under uncertainty covers
- 03Reference practiceDecision analysis is codified in risk and evaluation practice
- 04In systemic risk workChoosing when probabilities are contested
- 05Applied inPlatforms that apply this method
- 06StewardshipWho maintains this page
- 07Key termsTerms used on this page
GCRI · Institution · service level R0
The short answer.
Decision analysis under uncertainty provides structured methods for choosing among options when outcomes are uncertain and objectives conflict. Decision analysis helps choose actions that perform acceptably across interconnected risks and uncertain futures. In the Nexus Consortium, Systemic Risk Management stewards its canonical page, and 13 other platforms apply it, including Nexus Campaigns and Nexus Agency.
Systemic exposure in Mexico.
Where people and networks concentrate, the exposure through which shocks travel between systems, shown for Mexico as an example geography for this subject.
What decision analysis under uncertainty covers.
- 01
Core methods
decision trees; multi-criteria decision analysis; value of information analysis; robust decision making; expected utility analysis; adaptive pathways planning.
- 02
Data and instruments
expert elicitation; model outputs; stakeholder preference surveys; cost and benefit estimates; scenario sets.
- 03
Validation
Analyses are checked through sensitivity analysis, peer review and stakeholder scrutiny. Retrospective review compares decisions with outcomes.
- 04
Limits
Results depend on elicited probabilities and preferences that may be biased. Deep uncertainty can make expected value comparisons misleading.
- 05
Use in risk decisions
Decision analysis helps choose actions that perform acceptably across interconnected risks and uncertain futures. It clarifies when to act now and when to keep options open.
Decision analysis is codified in risk and evaluation practice.
| Reference | What it sets |
|---|---|
| ISO 31000 risk treatment | Selecting treatment options |
| Robust decision-making and dynamic adaptive pathways | Decisions under deep uncertainty |
| Cost-benefit and multi-criteria analysis guidance | Appraisal of options |
Choosing when probabilities are contested.
Under deep uncertainty, decision analysis seeks options that perform acceptably across many futures and adaptive pathways that can change course as information arrives. It supports decision-makers; it does not replace their judgement on values.
- Make value judgements explicit.
- Identify signposts that trigger pathway changes.
- Compare options across scenarios.
- Applications on Risk Management and Disaster Resilience and Recovery.
Platforms that apply this method.
- Nexus CampaignsInstitutionGCRI
- Nexus AgencyInstitutionGCRI
- Systemic Risk ManagementInstitutionGCRI
- Disaster Resilience and RecoveryInstitutionGCRI
- Policy NexusInstitutionGRF
- Foresight NexusInstitutionGRF
- Governance NexusInstitutionGRF
- Disaster and Crisis GovernanceInstitutionGRF
- Development Finance NexusInstitutionGRA
- Institutional Funds NexusInstitutionGRA
- Sovereign Capital NexusInstitutionGRA
- Disaster Risk FinanceInstitutionGRA
- Public Finance and Sovereign DebtInstitutionGRA
- Systems Science and ModellingInstitutionGCRI
Who maintains this page.
Systemic Risk Management stewards decision analysis under uncertainty: it keeps this description current and reviews how the method is applied across the platforms.
Terms used on this page.
Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.
| Term | Definition |
|---|---|
| Design standard | The hazard level, such as a return period, that infrastructure is built to withstand. |
| Value of further diligence | The expected improvement in a financing decision from more investigation before committing. |
| Pipeline screening | Ranking candidate projects against stated criteria before preparation. |
| Self-sufficiency | A funding position at which a scheme needs no further sponsor support under prudent assumptions. |
Where this page's references lead.
The bodies and documents this page is read against. Status and editions change; each link goes to the issuing body.
Where this page leads across the Consortium.
- Decision analysis for risk communicationGCRIApplied in Nexus Campaigns.
- Decision analysis for technical assistanceGCRIApplied in Nexus Agency.
- Decision analysis for risk managementGCRIApplied in Systemic Risk Management.
- Decision analysis for disaster riskGCRIApplied in Disaster Resilience and Recovery.
- Decision analysis for public choicesGRFApplied in Policy Nexus.
- Decision analysis in foresightGRFApplied in Foresight Nexus.
- Decision analysis for governing bodiesGRFApplied in Governance Nexus.
- Decision analysis under uncertainty for disaster and crisis governanceGRFApplied in Disaster and Crisis Governance.
- Decision analysis for development financeGRAApplied in Development Finance Nexus.
- Decision analysis for fund boardsGRAApplied in Institutional Funds Nexus.
- Decision analysis for sovereign choicesGRAApplied in Sovereign Capital Nexus.
- Decision analysis under uncertainty for disaster risk financeGRAApplied in Disaster Risk Finance.
- Decision analysis under uncertainty for public finance and sovereign debtGRAApplied in Public Finance and Sovereign Debt.
- Decision analysis for modellingGCRIApplied in Systems Science and Modelling.
Questions and answers.
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