Finding common ground when experts disagree: robust portfolio decision analysis

We address the problem of decision making under “deep uncertainty,” introducing an approach we call Robust Portfolio Decision Analysis. We introduce the idea of Belief Dominance as a prescriptive operationalization of a concept that has appeared in the literature under a number of names. We use this concept to derive a set of non-dominated portfolios; and then identify robust individual alternatives from the non-dominated portfolios. The Belief Dominance concept allows us to synthesize multiple conflicting sources of information by uncovering the range of alternatives that are intelligent responses to the range of beliefs. This goes beyond solutions that are optimal for any specific set of beliefs to uncover defensible solutions that may not otherwise be revealed. We illustrate our approach using a problem in the climate change and energy policy context: choosing among clean energy technology R&D portfolios. We demonstrate how the Belief Dominance concept can uncover portfolios that would otherwise remain hidden and identify robust individual investments

Developing robust composite measures of healthcare quality – ranking intervals and dominance relations for Scottish Health Boards

Although composite indicators are widely used to inform health system performance comparisons, such measures typically embed contentious assumptions, for instance about the weights assigned to constituent indicators. Moreover, although many comparative measures are constructed as ratios, the choice of denominator is not always straightforward. The conventional approach is to determine a single set of weights and to choose a single denominator, even though this involves considerable methodological difficulties. This study proposes an alternative approach to handle incomplete information about an appropriate set of weights and about a defensible denominator in composite indicators which considers all feasible weights and can incorporate multiple denominators. We illustrate this approach for comparative quality assessments of Scottish Health Boards. The results (displayed as ranking intervals and dominance relations) help identify Boards which cannot be ranked, say, worse than 4th or better than 7th. Such rankings give policy-makers a sense of the uncertainty around ranks, indicating the extent to which action is warranted. By identifying the full range of rankings that the organizations under comparison may attain, the approach proposed here acknowledges imperfect information about the “correct” set of weights and the appropriate denominator and may thus help to increase transparency of and confidence in health system performance comparisons

Utility-Scale Energy Storage in an Imperfectly Competitive Power Sector

Interest in sustainability has increased the share of variable renewable energy sources (VRES) in power generation. Energy storage systems' potential to mitigate intermittencies from non-dispatchable VRES has enhanced their appeal. However, the impacts of storage vary based on the owner and market conditions. We examine the policy implications of investments in utility-scale battery storage via a bi-level optimization model. The lower level depicts power system operations, modeled as either perfect competition or Cournot oligopoly to allow for the assessment of producer market power. The upper-level investor is either a welfare-maximizer or a profit-maximizing standalone merchant to reflect either welfare enhancement or arbitrage, respectively. We implement a realistic case study for Western Europe based on all possible size-location storage investment combinations. We find that market competition affects investment sizes, locations, and their profitability more than the investor's objectives. A welfare-maximizer under perfect competition invests the most in storage capacity. Consumers typically gain most from storage investments in all cases, exceeding the gains for the investors. Specifically, our results show that storage investments may either not occur or be located differently than at social optimum, if market power is exerted. Thus, policy makers need to anticipate producer market power when setting regulation

Facing the future: Scanning, synthesizing and sense-making in horizon scanning

In this paper, we discuss key issues in harnessing horizon scanning to shape systemic policies, particularly in the light of the foresight exercise ‘Facing the future: Time for the EU to meet global challenges' which was carried out for the Bureau of European Policy Advisors. This exercise illustrates how horizon scanning can enable collective sense-making processes which assist in the identification of emerging signals and policy issues; the synthesis of such issues into encompassing clusters; and the interpretation of resulting clusters as an important step towards the coordinated development of joint policy measures. In order to achieve such objectives, horizon scanning can benefit from methods of multi-criteria decision-making and network analysis for prioritizing, clustering and combining issues. Furthermore, these methods provide support for traceability, which in turn contributes to the enhanced transparency and legitimacy of foresigh

Multicriteria portfolio decision analysis for project selection

Multicriteria Portfolio Analysis spans several methods which typically employ build on MCDA to guide the selection of a subset (i.e.,portfolio) of available objects, with the aim of maximising the performance of the resulting portfolio with regard to multiple criteria, subject to the requirement that the selected portfolio does not consume of resources consumed by the portfolio does not exceed the availability of resources and, moreover, satisfies other relevant constraints as well. In this chapter, we present a formal model of this selection problem and describe how this model can present both challenges (e.g. portfolio value may, due to the interactions of elements, depend on project-level decisions in complex and non-additive ways) and opportunities (e.g.triage rules can be used to focus elicitation on projects which are critical) for value assessment. We also survey the application of Portfolio Decision Analysis in several domains, such as allocation of R&D expenditure, military procurement, prioritisation of healthcare projects, and environment and energy planning, and conclude by outlining possible future research directions

Asejärjestelmien kustannustehokkuuden arviointi simulointi- ja systeemianalyysimenetelmin

Cost-effectiveness evaluation of weapon systems is needed to support acquisition planning of new systems to produce well-grounded allocation of resources to achieve the impact requirements. Evaluation of cost-effectiveness is often complicated by presence of multiple impact criteria, which may depend on other systems used and the operating situation. The cost-effectiveness analysis of weapon systems supports producing recommendations on how resources should be allocated between the acquisition of new systems and the service and maintenance of previously acquired systems. We develop methodologies based on portfolio and scenario analysis for the costeffectiveness evaluation of weapon systems to support acquisition planning. The cost-effectiveness of weapon system combinations (i.e. portfolios) is evaluated at different budget levels with regard to several impact criteria in multiple scenarios. The information about the impacts of weapon systems is captured from an independent battle simulator, which allows taking into account the interdependencies among weapon systems. The developed methodology admits incomplete information on the evaluation data and also multiple interpretations of impact criteria's importance in different scenarios. The developed methodology is applied in the cost-effectiveness evaluation of artillery systems, where impact data is captured from Sandis battle simulator developed by Finnish Defence Forces. The full text is in Finnish.Cost-effectiveness evaluation of weapon systems Cost-effectiveness evaluation of weapon systems is needed to support acquisition planning of new systems to produce well-grounded allocation of resources to achieve the impact requirements. Evaluation of cost-effectiveness is often complicated by presence of multiple impact criteria, which may depend on other systems used and the operating situation. The cost-effectiveness analysis of weapon systems supports producing recommendations on how resources should be allocated between the acquisition of new systems and the service and maintenance of previously acquired systems. We develop methodologies based on portfolio and scenario analysis for the costeffectiveness evaluation of weapon systems to support acquisition planning. The cost-effectiveness of weapon system combinations (i.e. portfolios) is evaluated at different budget levels with regard to several impact criteria in multiple scenarios. The information about the impacts of weapon systems is captured from an independent battle simulator, which allows taking into account the interdependencies among weapon systems. The developed methodology admits incomplete information on the evaluation data and also multiple interpretations of impact criteria's importance in different scenarios. The developed methodology is applied in the cost-effectiveness evaluation of artillery systems, where impact data is captured from Sandis battle simulator developed by Finnish Defence Forces. Artikkeli on suomeksi

COVID-19-tutkimuskatsaus 3/2020

Koronapandemia on synnyttänyt ennennäkemättömän globaalin tutkimusponnistuksen. Kriisiin liittyvää tieteellistä tutkimustietoa on jo paljon ja sitä julkaistaan jatkuvasti kiihtyvällä tahdilla. Samaan aikaan tutkimustiedolle on myös suuri kysyntä. COVID-19-tutkimuskatsaus on valtioneuvoston kanslian elokuussa 2020 käynnistämä toimintamalli, joka koostaa koronakriisiin liittyviä uusimpia tutkimustuloksia maailmalta ja Suomesta tiiviisti ja informatiivisesti valmistelijoiden ja päätöksentekijöiden käyttöön. Katsauksen tavoitteena on vahvistaa ajankohtaisen tutkimustiedon välittymistä päätöksentekijöiden tietoon ja luoda näkymää viimeisimpään tutkimukseen