Abstract
Decision theory recognizes two principal approaches to solving problems under
uncertainty: probabilistic models and cognitive heuristics. However, engineers,
public planners and decision-makers in other fields seem to employ solution
strategies that do not fall into either field, i.e., strategies such as robust
design and contingency planning. In addition, identical strategies appear in
several fields and disciplines, pointing to an important shared toolkit.
The focus of this paper is to develop a systematic understanding of such
strategies and develop a framework to better employ them in decision making and
risk management. The paper finds more than 110 examples of such strategies and
this approach to risk is termed RDOT: Risk-reducing Design and Operations
Toolkit. RDOT strategies fall into six broad categories: structural, reactive,
formal, adversarial, multi-stage and positive. RDOT strategies provide an
efficient response even to radical uncertainty or unknown unknowns that are
challenging to address with probabilistic methods. RDOT could be incorporated
into decision theory using workflows, multi-objective optimization and
multi-attribute utility theory.
Overall, RDOT represents an overlooked class of versatile responses to
uncertainty. Because RDOT strategies do not require precise estimation or
forecasting, they are particularly helpful in decision problems affected by
uncertainty and for resource-constrained decision making.