Author Archive for peter

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Informatics

Published by peter on 2010-07-16 in Computer Science and Computer technology. Closed

A recent issue of the Communications of the ACM has an interesting article about degrees in Informatics, by Dennis Groth and Jeffrey Mackie-Mason.  They present a nice definition of the subject in this para:

The vision for informatics follows from the natural evolution of computing. The success of computing is in the resolution of problems, found in areas that are predominately outside of computing. Advances in computing—and computing education—require greater understanding of the problems where they are found: in business, science, and the arts and humanities. Students must still learn computing, but they must learn it in contextualized ways. This, then, provides a definition for informatics: informatics is a discipline that solves problems through the application of computing or computation, in the context of the domain of the problem. Broadening computer science through attention to informatics not only offers insights that will drive advances in computing, but also more options and areas of inquiry for students, which will draw increasing numbers of them to study computation.

Sadly, these views are not uncontroversial, as the online experiences which motivated my parody here illustrate.  The interesting experience of Georgia Tech, where the School of Computing is split into three parts  — Computer Science; Interactive Computing; and Computational Science and Engineering, — is described here.
Reference:
Dennis P. Groth and Jeffrey K. MacKie-Mason [2010]: Why an Informatics degree?  Isn’t computer science enough? Communications of the ACM, 53 (2):  26-28.  Available here.

At Swim-two-birds

Published by peter on 2010-07-10 in Art, Creativity, Music, Prophecy and Uncertainty. Closed


Brian Dillon reviews a British touring exhibition of the art of John Cage, currently at the Baltic Mill Gateshead.
Two quibbles:  First, someone who compare’s Cage’s 4′ 33” to a blank gallery wall hasn’t actually listened to the piece.  If Dillon had compared it to a glass window in the gallery wall allowing a view of the outside of the gallery, then he would have made some sense.  But Cage’s composition is not about silence, or even pure sound, for either of which a blank gallery wall might be an appropriate visual representation.  The composition is about ambient sound, and about what sounds count as music in our culture.
Second, Dillon rightly mentions that the procedures used by Cage for musical composition from 1950 onwards (and later for poetry and visual art) were based on the Taoist I Ching.  But he wrongly describes these procedures as being based on “the philosophy of chance.”     Although widespread, this view is nonsense, accurate neither as to what Cage was doing, nor even as to what he may have thought he was doing.   Anyone subscribing to the Taoist philosophy underlying them understands the I Ching procedures as examplifying and manifesting hidden causal mechanisms, not chance.   The point of the underlying philosophy is that the random-looking events that result from the procedures express something unique, time-dependent, and personal to the specific person invoking the I Ching at the particular time they invoke it. So, to a Taoist, the resulting music or art is not “chance” or “random” or “aleatoric” at all, but profoundly deterministic, being the necessary consequential expression of deep, synchronistic, spiritual forces. I don’t know if Cage was himself a Taoist (I’m not sure that anyone does), but to an adherent of Taoist philosophy Cage’s own beliefs or attitudes are irrelevant to the workings of these forces.  I sense that Cage had sufficient understanding of Taoist and Zen ideas (Zen being the Japanese version of Taoism) to recognize this particular feature:  that to an adherent of the philosophy the beliefs of the invoker of the procedures are irrelevant.
In my experience, the idea that the I Ching is a deterministic process is a hard one for many modern westerners to understand, let alone to accept, so entrenched is the prevailing western view that the material realm is all there is.  This entrenched view is only historically recent in the west:  Isaac Newton, for example, was a believer in the existence of cosmic spiritual forces, and thought he had found the laws which governed their operation.    Obversely, many easterners in my experience have difficulty with notions of uncertainty and chance; if all events are subject to hidden causal forces, the concepts of randomness and of alternative possible futures make no sense.  My experience here includes making presentations and leading discussions on scenario analyses with senior managers of Asian multinationals.
We are two birds swimming, each circling the pond, warily, neither understanding the other, neither flying away.
References:
Kyle Gann [2010]: No Such Thing as Silence.  John Cage’s 4′ 33”.  New Haven, CT, USA:  Yale University Press.
James Pritchett [1993]:  The Music of John Cage.  Cambridge, UK:  Cambridge University Press.

Bayesian statistics

Published by peter on 2010-07-08 in AI, Decision theory, Mathematics and Uncertainty. Closed

One of the mysteries to anyone trained in the frequentist hypothesis-testing paradigm of statistics, as I was, and still adhering to it, as I do, is how Bayesian approaches seemed to have taken the academy by storm.   One wonders, first, how a theory based – and based explicitly – on a measure of uncertainty defined in terms of subjective personal beliefs, could be considered even for a moment for an inter-subjective (ie, social) activity such as Science.

One wonders, second, how a theory justified by appeals to such socially-constructed, culturally-specific, and readily-contestable activities as gambling (ie, so-called Dutch-book arguments) could be taken seriously as the basis for an activity (Science) aiming for, and claiming to achieve, universal validity.   One wonders, third, how the fact that such justifications, even if gambling presents no moral, philosophical or other qualms,  require infinite sequences of gambles is not a little troubling for all of us living in this finite world.  (You tell me you are certain to beat me if we play an infinite sequence of gambles? Then, let me tell you, that I have a religion promising eternal life that may interest you in turn.)

One wonders, fourthly, where are recorded all the prior distributions of beliefs which this theory requires investigators to articulate before doing research.  Surely someone must be writing them down, so that we consumers of science can know that our researchers are honest, and hold them to potential account.   That there is such a disconnect between what Bayesian theorists say researchers do and what those researchers demonstrably do should trouble anyone contemplating a choice of statistical paradigms, surely. Finally, one wonders how a theory that requires non-zero probabilities be allocated to models of which the investigators have not yet heard or even which no one has yet articulated, for those models to be tested, passes muster at the statistical methodology corral.

To my mind, Bayesianism is a theory from some other world – infinite gambles, imagined prior distributions, models that disregard time or requirements for constructability,  unrealistic abstractions from actual scientific practice – not from our own.

So, how could the Bayesians make as much headway as they have these last six decades? Perhaps it is due to an inherent pragmatism of statisticians – using whatever techniques work, without much regard as to their underlying philosophy or incoherence therein.  Or perhaps the battle between the two schools of thought has simply been asymmetric:  the Bayesians being more determined to prevail (in my personal experience, to the point of cultism and personal vitriol) than the adherents of frequentism.  Greg Wilson’s 2001 PhD thesis explored this question, although without finding definitive answers.

Now, Andrew Gelman and the indefatigable Cosma Shalizi have written a superb paper, entitled “Philosophy and the practice of Bayesian statistics”.  Their paper presents another possible reason for the rise of Bayesian methods:  that Bayesianism, when used in actual practice, is most often a form of hypothesis-testing, and thus not as untethered to reality as the pure theory would suggest.  Their abstract:

A substantial school in the philosophy of science identifies Bayesian inference with inductive inference and even rationality as such, and seems to be strengthened by the rise and practical success of Bayesian statistics. We argue that the most successful forms of Bayesian statistics do not actually support that particular philosophy but rather accord much better with sophisticated forms of hypothetico-deductivism.  We examine the actual role played by prior distributions in Bayesian models, and the crucial aspects of model checking and model revision, which fall outside the scope of Bayesian confirmation theory. We draw on the literature on the consistency of Bayesian updating and also on our experience of applied work in social science.

Clarity about these matters should benefit not just philosophy of science, but also statistical practice. At best, the inductivist view has encouraged researchers to fit and compare models without checking them; at worst, theorists have actively discouraged practitioners from performing model checking because it does not fit into their framework.

References:
Andrew Gelman and Cosma Rohilla Shalizi [2010]:  Philosophy and the practice of Bayesian statistics.  Available from Arxiv.  Blog post here.

Gregory D. Wilson [2001]:   Articulation Theory and Disciplinary Change:  Unpacking the Bayesian-Frequentist Paradigm Conflict in Statistical Science.  PhD Thesis,  Rhetoric and Professional Communication Programme, New Mexico State University.  Las Cruces, NM, USA.  July 2001.

Mass customization of economic laws

Published by peter on 2010-07-06 in Economics and Global Economic Crisis. Closed

Belatedly, I have just seen a column by John Kay in the FT of 13 April 2010 (subscribers only), entitled:  “Economics may be dismal, but it is not a science.” His column reminded me of Stephen Toulmin’s arguments in his book Cosmopolis about the universalizing tendencies of modern western culture these last four centuries, which I discussed here.
An excerpt from Kay’s column:

Both the efficient market hypothesis and DSGE [Dynamic Stochastic General Equilibrium models] are associated with the idea of rational expectations – which might be described as the idea that households and companies make economic decisions as if they had available to them all the information about the world that might be available. If you wonder why such an implausible notion has won wide acceptance, part of the explanation lies in its conservative implications. Under rational expectations, not only do firms and households know already as much as policymakers, but they also anticipate what the government itself will do, so the best thing government can do is to remain predictable. Most economic policy is futile.
So is most interference in free markets. There is no room for the notion that people bought subprime mortgages or securitised products based on them because they knew less than the people who sold them. When the men and women of Goldman Sachs perform “God’s work”, the profits they make come not from information advantages, but from the value of their services. The economic role of government is to keep markets working.
These theories have appeal beyond the ranks of the rich and conservative for a deeper reason. If there were a simple, single, universal theory of economic behaviour, then the suite of arguments comprising rational expectations, efficient markets and DSEG would be that theory. Any other way of describing the world would have to recognise that what people do depends on their fallible beliefs and perceptions, would have to acknowledge uncertainty, and would accommodate the dependence of actions on changing social and cultural norms. Models could not then be universal: they would have to be specific to contexts.
The standard approach has the appearance of science in its ability to generate clear predictions from a small number of axioms. But only the appearance, since these predictions are mostly false. The environment actually faced by investors and economic policymakers is one in which actions do depend on beliefs and perceptions, must deal with uncertainty and are the product of a social context. There is no universal economic theory, and new economic thinking must necessarily be eclectic. That insight is Keynes’s greatest legacy.

The cultures of mathematics education

Published by peter on 2010-07-05 in Culture, Mathematics and Matherati. Closed

I posted recently about the macho culture of pure mathematics, and the undue focus that school mathematics education has on problem-solving and competitive games.

I have just encountered an undated essay, “The Two Cultures of Mathematics”, by Fields Medallist Timothy Gowers, currently Rouse Ball Professor of Mathematics at Cambridge.

Gowers identifies two broad types of research pure mathematicians:  problem-solvers and theory-builders.  He cites Paul Erdos as an example of the former (as I did in my earlier post), and Michael Atiyah as an example of the latter.   What I find interesting is that Gowers believes that the profession as a whole currently favours theory-builders over problem-solvers.  And domains of mathematics where theory-building is currently more important (such as Geometry and Algebraic Topology) are favoured over domains of mathematics where problem-solving is currently more important (such as Combinatorics and Graph Theory).

I agree with Gowers here, and wonder, then, why the teaching of mathematics at school still predominantly favours problem-solving over theory-building activities, despite a century of Hilbertian and Bourbakian axiomatics.  Is it because problem-solving was the predominant mode of British mathematics in the 19th century (under the pernicious influence of the Cambridge Mathematics Tripos, which retarded pure mathematics in the Anglophone world for a century) and school educators are slow to catch-on with later trends?  Or, is it because the people designing and implementing school mathematics curricula are people out of sympathy with, and/or not competent at, theory-building?

Certainly, if your over-riding mantra for school education is instrumental relevance than the teaching of abstract mathematical theories may be hard to justify (as indeed is the teaching of music or art or ancient Greek).

This perhaps explains how I could learn lots of tricks for elementary arithmetic in day-time classes at primary school, but only discover the rigorous beauty of Euclid’s geometry in special after-school lessons from a sympathetic fifth-grade teacher (Frank Torpie).

History under circumstances not of our choosing

Published by peter on 2010-07-02 in Anthropology, History, Military strategy and Politics. Closed

British MP Rory Stewart writing this week about western military policy towards Afghanistan:

We can do other things for Afghanistan but the West – in particular its armies, development agencies and diplomats – are not as powerful, knowledgeable or popular as we pretend. Our officials cannot hope to predict and control the intricate allegiances and loyalties of Afghan communities or the Afghan approach to government. But to acknowledge these limits and their implications would require not so much an anthropology of Afghanistan, but an anthropology of ourselves.
The cures for our predicament do not lie in increasingly detailed adjustments to our current strategy. The solution is to remind ourselves that politics cannot be reduced to a general scientific theory, that we must recognize the will of other peoples and acknowledge our own limits. Most importantly, we must remind our leaders that they always have a choice.
That is not how it feels. European countries feel trapped by their relationship with NATO and the United States. Holbrooke and Obama feel trapped by the position of American generals. And everyone – politicians, generals, diplomats and journalist – feels trapped by our grand theories and beset by the guilt of having already lost over a thousand NATO lives, spent a hundred billion dollars and made a number of promises to Afghans and the West which we are unlikely to be able to keep.
So powerful are these cultural assumptions, these historical and economic forces and these psychological tendencies, that even if every world leader privately concluded the operation was unlikely to succeed, it is almost impossible to imagine the US or its allies halting the counter-insurgency in Afghanistan in the years to come.  Roman Emperor Frederick Barbarossa may have been in a similar position during the Third Crusade.  Former US President Lyndon B. Johnson certainly was in 1963. Europe is simply in Afghanistan because America is there. America is there just because it is. And all our policy debates are scholastic dialectics to justify this singular but not entirely comprehensible fact.

Postcards to the future

Published by peter on 2010-07-01 in Anthropology, Consumer Behaviour, Culture and Literature. Closed

Designer & blogger Russell Davies has an interesting post about sharing, but he is mistaken about books.   He says:

A mixtape is more valuable gift than a spotify playlist because of that embedded value, because everyone knows how much work they are, of the care you have to take, because there is only one. If it gets lost it’s lost. Sharing physical goods is psychically harder than sharing information because goods are more valuable. And, therefore, presumably, the satisfactions of sharing them are greater.  I bet there’s some sort of neurological/evolutionary trick in there, physical things will always feel more valuable to us because that’s what we’re used to, that’s what engages our senses. Even though ebooks are massively more convenient, usable and useful than paper ones, that lack of embodiedness nags away at us – telling us that this thing’s not real, not proper, not of value. (And maybe we don’t have the same effect with music because we’re less used to having music engage so many of our senses. It’s pretty unembodied anyway.)

No, it’s not that we value physical objects like books because we are used to doing so, nor (a really silly idea, this) because of some form of long-range evolutionary determinism.  (If our pre-literate ancestors only valued physical objects, why did they paint art on cave walls?)   No, we value books because they are a tangible reminder to us of the feelings we had while reading them, a souvenir postcard sent from our past self to our future self.

ebooks are only more convenient, usable and useful than paper ones if your purpose to read from start to finish, or to dip into them here and there. If instead, as is usually the case with mathematics books, you need to read some chapters or sections while continually referring back to earlier ones (for example, the chapters with definitions), then a physical book and multiple book-marks is orders of magnitude more convenient, usable and useful than an e-book.

And no African would agree that music is unembodied. You show your appreciation for music you hear by joining in, physically, dancing or singing or tapping a foot or beating a hand in time. Music is actually the most embodied of the arts.

The glass bead game of mathematical economics

Published by peter on 2010-07-01 in Decision theory, Economics and Mathematics. Closed

Over at the economics blog, A Fine Theorem, there is a post about economic modelling.
My first comment is that the poster misunderstands the axiomatic method in pure mathematics.  It is not the case that “axioms are by assumption true”.  Truth is a bivariant relationship between some language or symbolic expression and the world.  Pure mathematicians using axiomatic methods make no assumptions about the relationship between their symbolic expressions of interest and the world.   Rather they deduce consequences from the axioms, as if those axioms were true, but without assuming that they are.    How do I know they do not assume their axioms to be true?  Because mathematicians often work with competing, mutually-inconsistent, sets of axioms, for example when they consider both Euclidean and non-Euclidean geometries, or when looking at systems which assume the Axiom of Choice and systems which do not.   Indeed, one could view parts of the meta-mathematical theory called Model Theory as being the formal and deductive exploration of multiple, competing sets of axioms.
On the question of economic modeling, the blogger presents the views of Gerard Debreu on why the abstract mathematicization of economics is something to be desired.   One should also point out the very great dangers of this research program, some of which we are suffering now.  The first is that people — both academic researchers and others — can become so intoxicated with the pleasures of mathematical modeling that they mistake the axioms and the models for reality itself.  Arguably the widespread adoption of financial models assuming independent and normally-distributed errors was the main cause of the Global Financial Crisis of 2008, where the errors of complex derivative trades (such as credit default swaps) were neither independent nor as thin-tailed as Normal distributions are.  The GFC led, inexorably, to the Great Recession we are all in now.
Secondly, considered only as a research program, this approach has serious flaws.  If you were planning to construct a realistic model of human economic behaviour in all its diversity and splendour, it would be very odd to start by modeling only that one very particular, and indeed pathological, type of behaviour examplified by homo economicus, so-called rational economic man.   Acting with with infinite mental processing resources and time, with perfect knowledge of the external world, with perfect knowledge of his own capabilities, his own goals, own preferences, and indeed own internal knowledge, with perfect foresight or, if not, then with perfect knowledge of a measure of uncertainty overlaid on a pre-specified sigma-algebra of events, and completely unencumbered with any concern for others, with any knowledge of history, or with any emotions, homo economicus is nowhere to be found on any omnibus to Clapham.  Starting economic theory with such a creature of fiction would be like building a general theory of human personality from a study only of convicted serial killers awaiting execution, or like articulating a general theory of evolution using only a hand-book of British birds.   Homo economicus is not where any reasonable researcher interested in modeling the real world would start from in creating a theory of economic man.
And, even if this starting point were not on its very face ridiculous, the fact that economic systems are complex adaptive systems should give economists great pause.   Such systems are, typically, not continuously dependent on their initial conditions, meaning that a small change in input parameters can result in a large change in output values.   In other words, you could have a model of economic man which was arbitrarily close to, but not identical with, homo economicus, and yet see wildly different behaviours between the two.  Simply removing the assumption of infinite mental processing resources creates a very different economic actor from the assumed one, and consequently very different properties at the level of economic systems.  Faced with such overwhelming non-continuity (and non-linearity), a naive person might expect economists to be humble about making predictions or giving advice to anyone living outside their models.   Instead, we get an entire profession labeling those human behaviours which their models cannot explain as “irrational”.
My anger at The Great Wen of mathematical economics arises because of the immorality this discipline evinces:   such significant and rare mathematical skills deployed, not to help alleviate suffering or to make the world a better place (as those outside Economics might expect the discipline to aspire to), but to explore the deductive consequences of abstract formal systems, systems neither descriptive of any reality, nor even always implementable in a virtual world.

Lady Ophelia of Old Malden

Published by peter on 2010-07-01 in Art, Culture and Film. Closed


News today that an amateur art-historian, Barbara Webb, has identified the location which pre-Raphaelite painter John Everett Millais used as background for his 1851 painting of the drowned Ophelia.  The location is on the Hogsmill River at Old Malden in south London.   It’s a long way from Elsinore.

The after-life of this image has been immense, at least in the English-speaking world.  For instance, a print of the painting appears on the wall of the room rented by George Eastman, the humble protagonist of George Stevens’ 1951 movie, A Place in the Sun, a film of Theodore Dreiser’s novel, An American Tragedy.  I took the presence of the print on Eastman’s wall not only as prophecy of the tragedy to come, but also as a reference to Hamlet, since Eastman, as he is played by Montgomery Clift, is undecided between his two lovers and the two very different fates which his involvement with them entails.

Complex Decisions

Published by peter on 2010-06-27 in Decision theory, Economics, Forecasting, Game theory, Joint-Action Society, Market planning, Military strategy, Planning, Project Management and Team working. 0 Comments

Most real-world business decisions are considerably more complex than the examples presented by academics in decision theory and game theory.  What makes some decisions more complex than others? Here I list some features, not all of which are present in all decision situations.

  • The problems are not posed in a form amenable to classical decision theory.

    Decision theory requires the decision-maker to know what are his or her action-options, what are the consequences of these, what are the uncertain events which may influence these consequences, and what are the probabilities of these uncertain events (and to know all these matters in advance of the decision). Yet, for many real-world decisions, this knowledge is either absent, or may only be known in some vague, intuitive, way. The drug thalidomide, for example, was tested thoroughly before it was sold commercially – on male and female human subjects, adults and children. The only group not to be tested were pregnant women, which were, unfortunately, the main group for which the drug had serious side effects. These side effects were consequences which had not been imagined before the decision to launch was made. Decision theory does not tell us how to identify the possible consequences of some decision, so what use is it in real decision-making?

  • There are fundamental domain uncertainties.

    None of us knows the future. Even with considerable investment in market research, future demand for new products may not be known because potential customers themselves do not know with any certainty what their future demand will be. Moreover, in many cases, we don’t know the past either. I have had many experiences where participants in a business venture have disagreed profoundly about the causes of failure, or even success, and so have taken very different lessons from the experience.

  • Decisions may be unique (non-repeated).

    It is hard to draw on past experience when something is being done for the first time. This does not stop people trying, and so decision-making by metaphor or by anecdote is an important feature of real-world decision-making, even though mostly ignored by decision theorists.

  • There may be multiple stakeholders and participants to the decision.

    In developing a business plan for a global satellite network, for example, a decision-maker would need to take account of the views of a handful of competitors, tens of major investors, scores of minor investors, approximately two hundred national and international telecommunications regulators, a similar number of national company law authorities, scores of upstream suppliers (eg equipment manufacturers), hundreds of employees, hundreds of downstream service wholesalers, thousands of downstream retailers, thousands or millions of shareholders (if listed publicly), and millions of potential customers. To ignore or oppose the views of any of these stakeholders could doom the business to failure.

    As it happens, Game Theory isn’t much use with this number and complexity of participants. Moreover, despite the view commonly held in academia, most large Western corporations operate with a form of democracy. (If opinions of intelligent, capable staff are regularly over-ridden, these staff will simply leave, so competition ensures democracy. In addition, good managers know that decisions unsupported by their staff will often be executed poorly, so success of a decision may depend on the extent to which staff believe it has been reached fairly.) Accordingly, all major decisions are decided by groups or teams, not at the sole discretion of an individual. Decision theorists, it seems to me, have paid insufficient attention to group decisions: We hear lots about Bayesian decision theory, but where, for example, is the Bayesian theory of combining subjective probability assessments?

  • Domain knowledge may be incomplete and distributed across these stakeholders.
  • Beliefs, goals and preferences of the stakeholders may be diverse and conflicting.
  • Beliefs, goals and preferences of stakeholders, the probabilities of events and the consequences of decisions, may be determined endogenously, as part of the decision process itself.

    For instance, economists use the term network good to refer to a good where one person’s utility depends on the utility of others. A fax machine is an example, since being the sole owner of fax is of little value to a consumer. Thus, a rational consumer would determine his or her preferences for such a good only AFTER learning the preferences of others. In other words, rational preferences are determined only in the course of the decision process, not beforehand.  Having considerable experience in marketing, I contend that ALL goods and services have a network-good component. Even so-called commodities, such as natural resources or telecommunications bandwidth, have demand which is subject to fashion and peer pressure. You can’t get fired for buying IBM, was the old saying. And an important function of advertising is to allow potential consumers to infer the likely preferences of other consumers, so that they can then determine their own preferences. If the advertisement appeals to people like me, or people to whom I aspire to be like, then I can infer that those others are likely to prefer the product being advertized, and thus I can determine my own preferences for it. Similarly, if the advertisement appeals to people I don’t aspire to be like, then I can infer that I won’t be subject to peer pressure or fashion trends, and can determine my preferences accordingly.

    This is commonsense to marketers, even if heretical to many economists.

  • The decision-maker may not fully understand what actions are possible until he or she begins to execute.
  • Some actions may change the decision-making landscape, particularly in domains where there are many interacting participants.

    A bold announcement by a company to launch a new product, for example, may induce competitors to follow and so increase (or decrease) the chances of success. For many goods, an ecosystem of critical size may be required for success, and bold initiatives may act to create (or destroy) such ecosystems.

  • Measures of success may be absent, conflicting or vague.
  • The consequences of actions, including their success or failure, may depend on the quality of execution, which in turn may depend on attitudes and actions of people not making the decision.

    Most business strategies are executed by people other than those who developed or decided the strategy. If the people undertaking the execution are not fully committed to the strategy, they generally have many ways to undermine or subvert it. In military domains, the so-called Powell Doctrine, named after former US Secretary of State Colin Powell, says that foreign military actions undertaken by a democracy may only be successful if these actions have majority public support. (I have written on this topic before.)

  • As a corollary of the previous feature, success of an action may require extensive and continuing dialog with relevant stakeholders, before, during and after its execution. This is not news to anyone in business.
  • Success may require pre-commitments before a decision is finally taken.

    In the 1990s, many telecommunications companies bid for national telecoms licences in foreign countries. Often, an important criterion used by the Governments awarding these licences was how quickly each potential operator could launch commercial service. To ensure that they could launch service quickly, some bidders resorted to making purchase commitments with suppliers and even installing equipment ahead of knowing the outcome of a bid, and even ahead, in at least one case I know, of deciding whether or not to bid.

  • The consequences of decisions may be slow to realize.

    Satellite mobile communications networks have typically taken ten years from serious inception to launch of service.  The oil industry usually works on 50+ year cycles for major investment projects.  BP is currently suffering the consequence in the Gulf of Mexico of what appears to be a decades-long culture which de-emphasized safety and adequate contingency planning.

  • Decision-makers may influence the consequences of decisions and/or the measures of success.
  • Intelligent participants may model each other in reaching a decision, what I term reflexivity.

    As a consequence, participants are not only reacting to events in their environment, they are anticipating events and the reactions and anticipations of other participants, and acting proactively to these anticipated events and reactions. Traditional decision theory ignores this. Following Nash, traditional game theory has modeled the outcomes of one such reasoning process, but not the processes themselves. Evolutionary game theory may prove useful for modeling these reasoning processes, although assuming a sequence of identical, repeated interactions does not strike me as an immediate way to model a process of reflexivity.  This problem still awaits its Nash.

In my experience, classical decision theory and game theory do not handle these features very well; in some cases, indeed, not at all.  I contend that a new theory of complex decisions is necessary to cope with decision domains having these features.