Defining Uncertainty: A Conceptual Basis for Uncertainty Management in Model-Based Decision Support

Abstract

The aim of this paper is to provide a conceptual basis for the systematic treatment of uncertainty in model-based decision support activities such as policy analysis, integrated assessment and risk assessment. It focuses on the uncertainty perceived from the point of view of those providing information to support policy decisions (i.e., the modellers’ view on uncertainty) – uncertainty regarding the analytical outcomes and conclusions of the decision support exercise. Within the regulatory and management sciences, there is neither commonly shared terminology nor full agreement on a typology of uncertainties. Our aim is to synthesise a wide variety of contributions on uncertainty in model-based decision support in order to provide an interdisciplinary theoretical framework for systematic uncertainty analysis. To that end we adopt a general definition of uncertainty as being any deviation from the unachievable ideal of completely deterministic knowledge of the relevant system. We further propose to discriminate among three dimensions of uncertainty: location, level and nature of uncertainty, and we harmonise existing typologies to further detail the concepts behind these three dimensions of uncertainty. We propose an uncertainty matrix as a heuristic tool to classify and report the various dimensions of uncertainty, thereby providing a conceptual framework for better communication among analysts as well as between them and policymakers and stakeholders. Understanding the various dimensions of uncertainty helps in identifying, articulating, and prioritising critical uncertainties, which is a crucial step to more adequate acknowledgement and treatment of uncertainty in decision support endeavours and more focused research on complex, inherently uncertain, policy issues.