Muddling-Through and Deep Learning for Managing Large-Scale Uncertain Risks

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By: Tony Cox

September 17, 2019

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ABSTRACT

Managing large-scale, geographically distributed, and long-term risks arising from diverse underlying causes – ranging from poverty to underinvestment in protecting against natural hazards or failures of sociotechnical, economic, and financial systems – poses formidable challenges for any theory of effective social decision-making. Participants may have different and rapidly evolving local information and goals, perceive different opportunities and urgencies for actions, and be differently aware of how their actions affect each other through side effects and externalities. Six decades ago, political economist Charles Lindblom viewed “rational-comprehensive decision-making” as utterly impracticable for such realistically complex situations. Instead, he advocated incremental learning and improvement, or “muddling through,” as both a positive and a normative theory of bureaucratic decision-making when costs and benefits are highly uncertain. But sparse, delayed, uncertain, and incomplete feedback undermines the effectiveness of collective learning while muddling through, even if all participant incentives are aligned; it is no panacea. We consider how recent insights from machine learning – especially, deep multiagent reinforcement learning – formalize aspects of muddling through and suggest principles for improving human organizational decision-making. Deep learning principles adapted for human use can not only help participants in different levels of government or control hierarchies manage some large-scale distributed risks, but also show how rational-comprehensive decision analysis and incremental learning and improvement can be reconciled and synthesized.

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This article is part of a working paper series convened by the GW Regulatory Studies Center. The other articles are also available from JBCA:

Responsible Precautions for Uncertain Environmental Risks - By: W. Kip Viscusi, Joel Huber, & Jason Bell

Nuclear War as a Global Catastrophic Risk - By: James Scouras

From Football to Oil Rigs: Risk Assessment for Combined Cyber and Physical Attacks - By: Fred S. Roberts

Dynamic Benefit-Cost Analysis for Uncertain Futures - By: Susan E. Dudley,  Daniel R. Pérez, Brian F. Mannix, & Christopher Carrigan