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APPENDIX G.2
Decision Modeling as an Aid to Strategic Planning and Crisis
Action
Paul K. Davis, Rand
ABSTRACT
Most studies of deterrence and crisis action approach issues in
the vernacular and structures of political science. This paper
summarizes an alternative approach based on behavioral decision
models. Decision modeling has distinct advantages for structuring
issues, appreciating psychological factors, avoiding mirror imaging
and the tyranny of the best estimate, and discriminating among
situations when developing strategy. The decision models are not
the familiar abstract constructs of utility theory, but rather
natural-language models expressed in diagrams and tables that can
be discussed in group settings and used to guide or generalize from
political-military crisis games. Although the methodology requires
background use of logic and mathematics and should be guided by
serious analysts, it largely involves concepts and reasoning
understandable by individuals with backgrounds as diverse as law,
international relations, physical science, psychology, or military
planning. The methods have been applied experimentally to nuclear
crisis stability, understanding and predicting the behavior of
Saddam Hussein, understanding historical crises early in the
century, the decisions of states contemplating development of
nuclear weapons, and strategies for dealing with North Korea.
INTRODUCTION
There are many ways to approach the issue of deterrence. The one
discussed here (see references for details and citations to the
literature) focuses on understanding the reasoning of the
potential aggressor (who may not think of himself as an aggressor).
This approach is concerned with human perceptions, arguments, and
logic-all of them affected by psychological considerations. It
seeks to describe such reasoning analytically by building models of
reasoning that can be used not only to improve insights
retrospectively but also to guide strategy
prospectively.
In attempting to describe reasoning analytically, one could
structure the problem in any of several ways. The approach
described here assumes limited rationality and universal
classes of reasoning patterns. Assuming "limited rationality" means
that the relevant leaders (1) attempt to relate means to ends
(i.e., their decisions and actions have purpose); (2) consider a
range of options; and (3) evaluate those options in terms of likely
outcome, most favorable outcome, and worst-case outcome. Thus, the
leaders attempt to be rational and
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even take uncertainty into account. However, their decisions may
be flawed because of incomplete or incorrect information, the
mental frames through which information is viewed, anxieties,
extreme dissatisfaction with the status quo, erroneous mental
models of the other protagonists, and other factors. Perceptions
may even shift wildly during a fast-moving crisis. Further, leaders
have very different attitudes about risk taking.
It is controversial in some circles to assume rationality, but
most of the national leaders who have sometimes been described as
irrational (e.g., Adolph Hitler, Joseph Stalin, the Ayatollah
Khomeni, and Saddam Hussein) were quite rational in the sense
defined above. Some of them suffered from severe psychological
problems and exhibited bizarre and abhorrent behavior, but their
most strategically significant decisions can be understood in terms
of their objectives and perceptions. It is also important to
recognize that all of us are subject to making a wide
variety of perceptual and reasoning errors, but we do not consider
ourselves irrational. "Limited rationality" allows for a wide
variety of such cognitive "errors," which go by names such as
framing, anchoring, attributional inference, "group think," and so
on.
The second assumption is that it is useful to structure the
theory around universally observable types of reasoning rather than
culture-specific concepts such as the so-called Arab, Oriental,
Latin, or Western minds. To be sure, cultural factors can have
profound effects that must be reflected in any application of
theory, but the current approach has such factors entering along
the way in context-dependent ways rather than as part of basic
structure. The relevant behaviors of historical leaders can be
found in all cultures, albeit with different frequencies. For
example, the Arab world has produced Anwar Sadat and Saddam
Hussein, and the Western world has produced George Bush and Adolph
Hitler.
MODELING OPPONENTS AND THEIR
ASSESSMENT OF OPTIONS
Assessment of Options
Let us next consider how many aggressors may, in effect,
have reasoned about their options in the past and how many others
may do so in the future. To repeat, they are attempting to make
rational decisions. They are considering options and are also
examining likely and possible consequences of those options, as
suggested in Table G.2. 1. The format here is that for each option
the reasoner estimates the likely outcome, most favorable outcome,
and worst-case outcome. He then makes an overall assessment of the
option based on these estimates. Each outcome is characterized by a
value in the set {Very Bad, Bad, Marginal, Good, Very Good}.
Although real-world reasoning is seldom so tidy or linear, the
assumption here is that it ends up addressing the issues
indicated.
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This basic structure is generic, but estimates of the various
outcomes depend sensitively on perceptions and values. To
understand how a potential opponent might reach individual
judgments about, for example, the worst-case outcome (would it be
Very Bad, Bad, Marginal, Good, or Very Good?), we need:
• Alternative mental images of the opponent,
• An understanding of what factors are most likely to
affect the opponent's reasoning,
• A way to go systematically from the
image and factors to estimates of the opponents' various judgments,
and
• A way to combine judgments in reaching overall
assessments of options.
Alternative Images of the
Opponent
Developing alternative images is an antidote to some of
the problems associated with the tyranny of best-estimate thinking,
which is so often wrong. To develop alternative images of the
opponent's reasoning, one can use a combination of essay writing,
attribute lists, influence diagrams, and cognitive maps. In one
image, for example, the opponent may be pragmatic and
incrementalist; in another, he may be exceedingly ambitious and
frustrated; in yet a third, he may feel cornered, surrounded by
enemies, and desperate.
Figure G.2.1 shows contrasting "cognitive maps" (closely related
to what others call "influence diagrams") used in a study of Saddam
Hussein. They represent very different images of Saddam's
perceptions about the economic situation in mid-1990. The
convention in such diagrams is that when an arrow connects two
items, an increase or improvement in the first leads to an increase
or improvement in the second, unless there is a negative sign, in
which case an increase or improvement in the first leads to a
decrease or worsening in the second. Negative signs are usually
used to indicate a troublesome influence.
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For example, at the bottom of Figure G.2.1a, we see that an
increase in U.S. trade sanctions would worsen Iraq's
economic status.
Figure G.2.1a represents the cause-effect relationships
emphasized in the intelligence community's "best-estimate"
understanding of Saddam prior to the invasion. Figure G.2. lb
represents an alternative image that could readily have been
formulated at the time, except for the pressures to focus on a
single best estimate. It includes additional factors such as
Saddam's perception that his problems were the direct result of
Iraq's being squeezed deliberately by his enemies (the United
States, Kuwait, and Saudi Arabia among them). It also highlights
the connection between his economic travails and his grandiose
ambitions. Note that although nearly all the experts would have
agreed on all the factors in either diagram being "significant,"
the dominant mental image (Figure G.2. 1a) was one in which some of
the factors were not given much emotional weight. The purpose of
the diagrams is merely to highlight differences of perspective, in
this case differences in perspective about how Saddam might be
viewing the world. We used a number of such diagram pairs in
depicting our two images or models of Saddam Hussein. Although the
work started after the invasion and we therefore had no trouble
constructing a model to explain it, the models were both insightful
and predictive for Saddam's subsequent behavior through February
1991 (i.e., his failure to pull out of Kuwait in the kind of
compromise American strategists feared).
Table G.2.2 illustrates a different method for clarifying
distinctions between images of the opponent, one based on an
attribute list. Again using the example from our study of Saddam
Hussein, Model 1 is painted as being essentially pragmatic and
relatively risk averse. Model 2 is more ambition driven and risk
accepting.
Identifying the Factors Affecting
Judgments and Decisions
Suppose we have used methods such as the cognitive maps,
attribute lists, and other devices to develop strong alternative
mental images of the opponent. The next step is identifying the
factors (i.e., variables) most likely to contribute to the
opponent's judgments, notably judgments about the likely,
best-case, and worst-case outcomes of various options. It is not
very useful to attempt this in abstract terms, because so much of
what seems to matter is exquisitely context dependent. It is more
useful to brainstorm the problem with an interdisciplinary mix of
regional experts and strategists, to identify key factors in
concrete "natural" language (e.g., Saddam Hussein's assessment of
President Bush's resolve), and to develop hierarchies of
such factors (or variables). This approach reflects the observation
that people make their most reasoned judgments on the basis of only
a few "high-level" variables, but these variables, in turn,
sometimes reflect many subordinate judgments about "lower-level
variables."
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Figure G.2.1 Saddam's image of the 1990 economic
situation: two models.
To illustrate this, consider how Saddam Hussein may, in
mid-1990, have assessed his worst-case outcome (i.e., his "risks")
for an option in which he invades Kuwait. Was the worst-case
outcome (risks) very bad, bad, marginal, good, or very good? In the
summer of 1990 as Saddam Hussein contemplated this matter, it is
likely that he considered the risks would result from two principal
possibilities: the possibility that the United States would defend
Kuwait directly and immediately, and the possibility that even
though the United States didn't defend Kuwait itself, it would
deploy forces into Saudi Arabia and change the balance of power in
the region We do not know that Saddam thought about the
problem this way, but it is likely that these possibilities were on
his mind explicitly or implicitly. To assess risks, then, he would
be concerned about the likelihood of each of these possibilities
and the consequences. The consequences of an immediate war with the
United States would obviously be very bad, but the likelihood of
that (i.e., the likelihood of the United States defending Kuwait)
probably did not appear large. The United States was more likely to
deploy into Saudi Arabia, although the Saudis probably would
not permit it, but even if such a deployment and related
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Table G.2.2 Comparing Attributes of Models 1
and 2 of Saddam Hussein
Attribute
Model
1
Model
2
Ruthless, power focused; emphasizes
realpolitik
••
••
Ambitious
••
••
"Responsive"; seeks easy opportunistic gains
••
•
Impatiently goal seeking; likely to seek
initiative
•
••
Strategically aggressive with nonincremental
attitudes
••
Contemptuous of other Arab leaders
•
••
Contemptuous of U.S. will and staying power
••
Financially strapped and frustrated
••
••
Capable of reversing himself strategically;
flexible (not suicidal)
••
••
Clever and calculating (not a hip shooter)
••
•
Pragmatic and once burned, now cautious
••
Still risk taking in some situations
•
••
Grandiosely ambitious
•
••
Paranoid tendencies with some basis
•
••
Concerned about reputation and legitimacy in Arab
and Islamic worlds
•
Concerned only about being respected for his
power
••
Sensitive to potential U.S. power not
immediately present
••
•
sanctions occurred, the likely consequences would be tolerable:
the Saudis would tire of the U.S. presence, other regional states
would deplore it, and economic sanctions would probably not last
longer than 6 months or so.
Figure G.2.2 characterizes hierarchically Saddam's likely risk
assessment when he contemplated the particular option of conquering
Kuwait. For example, the figure suggests that Saddam would have
seen larger risks if there had been strong and credible political
warning of U.S. intervention, warning evidenced by strong and
credible diplomatic messages along with other indications of
resolve by President Bush and Congress. Saddam would also have seen
higher risks if there were reason to believe that the United States
considered Kuwait to be a vital national interest. Indicators of
that might have been a defense agreement, the presence in Kuwait of
U.S. forces, or "objective" considerations such as the expectation
that Iraq would cut off Kuwaiti oil to the West. Diagrams such as
that in Figure G.2.2 can be worked out in group discussions and
then embellished with subsequent analysis.
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Figure G.2.2 Possible map of Saddam's assessment
of risk before invading.
Estimating the Opponent's Judgments
and Decisions
Given alternative images of the opponent and an understanding of
likely options and major variables or factors, it is possible to
estimate how the opponent might reason in a wide variety of
circumstances—not merely today's circumstances, but those that
might exist tomorrow or next year. For each image of the opponent,
we can develop what can be called judgment tables and decision
tables. Judgment tables represent how the opponent might look at
each of several factors and reach an overall judgment about, say,
the most likely or worst-case outcome of a given option. A decision
table is similar but relates specifically to evaluating the options
in a common format.
Table G.2.3 illustrates a judgment table for model 2 of Saddam
Hussein evaluating risks of a conquer-Kuwait option in mid- 1990
consistent with the factors identified in Figure G.2.2. It covers a
wide variety of possible world situations. Lines indicated in bold
letters show the situations that Saddam probably believed best
characterized reality in mid-1990, with the result that he probably
considered risks to be marginal (or less) rather than bad or very
bad.
Table G.2.4 shows a decision table for model 2 of Saddam Hussein
evaluating strategic options in late July 1990. The net assessment
for the conquer-Kuwait option is very good. (By contrast, model l's
assessment was very bad.)
Where do the judgments and decisions (i.e., the values in the
last columns of Tables G.2.3 and G.2.4) come from? They are
subjective estimates made by the author and colleagues, who studied
the alternative images and tried to "get inside the minds" of the
adversaries. However, there is logic connecting the elements of the
image (e.g., the cognitive maps and attribute lists) with the
individual judgments. Indeed, some of this can be treated
mathematically to
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improve rigor. (It is also possible to build artificial
intelligence models to formalize the logic, but the price of doing
so is very high.)
The following formula is one way to express the combining logic
mathematically when estimating the "net assessment" of an
option:
N = R{aL+bM+cW}/{a+b+c}
Here N is the net assessment of an option; L, M,
and W represent, respectively, the likely outcome,
most-favorable outcome, and worst-case outcome; R is a
rounding operator; and a, b, and c are weighting
factors. If reasoning itself is qualitative, then the formula can
be used by first mapping the qualitative values into numbers (e.g.,
very bad? -2, bad? -1, . . .), computing the net assessment
numerically, and then remapping the result back into qualitative
values. This approach creates a preference order for the options.
By choosing different values of a, b, and c, one can
represent the reasoning of leaders that are more and less risk
acceptant, or less and more tolerant of the status quo. This is
quite important in practice.
It is useful to postulate several types of reasoning that differ
primarily in attitudes toward risk and that assume a higher
willingness to take risks when the current and projected situations
are deemed to be very bad and a reduced willingness to take risks
when the current situation and prospects are deemed to be
reasonably good. This reflects the well-established (and
intuitively familiar) psychological phenomenon described in
"prospect theory," developed largely through the work of Daniel
Kahneman and Amos Tversky. Psychologically, the reasoning styles
might better be characterized as having a predisposition to "go for
it" or "take no chance," depending on perceptions about the
goodness of the current situation and current trends. Another key
point the author has highlighted is the role of thresholds: below
some level of perceived probability, risk is treated as zero,
despite the consequences of the risk. That is, not only do we often
underestimate risks, but we also often go farther and ignore
those we have judged low. The reverse also happens: we sometimes
rule out options because we see them as involving a level of risk
beyond some threshold of acceptability.
The point here is that we cannot only construct formal models to
reflect best-estimate notions about how the opponent is and may in
the future be reasoning; we can also construct alternative models
to reflect fundamental uncertainties about the nature of that
reasoning. The principal question, of course, is whether we have to
consider an infinite number of such alternative models. The answer
appears to be no. Indeed, having two or at most three models
appears to go a very long way, especially since one can also do
sensitivity analysis within a given model. This is crucial, because
it means that the technique, which is surely good for getting
groups to confront uncertainty and be more humble about any "best
estimate," should also be workable in practice. Formal intelligence
estimates and high-level meetings should be able
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Table G.2.3 Model 2's Late July Risk Assessment
for the Conquer-Kuwait Option
LIKELIHOOD OF U.S. DEFENDING KUWAIT
LIKELIHOOD OF U.S. DEPLOYING INTO SAUDI ARABIA
CONSEQUENCES OF U.S. DEPLOYING INTO SAUDI
ARABIA
ARAB ATTIUDES ABOUT INVASION
RISKS
Low
High
Very Bad
—
Very High
Low
Marginal
Very Bad
Bad
High
Low
Marginal
Very Bad
Marginal or Good
High
Low
Low
Very Bad
Bad
Low
Low
Low
Very Bad
Marginal or Good
Low
Low
High
Bad
Bad
High
Low
High
Bad
Marginal or Good
High
Low
Marginal
Bad
Bad or Marginal
Marginal
Low
Marginal
Bad
Good
Low
Low
Low
Bad
Bad
Low
Low
Low
Bad
Marginal or Good
Low
Low
High
Marginal
Bad
Marginal
Low
High
Marginal
Marginal or Good
Marginal
Low
Marginal
Marginal
Bad
Low
Low
Marginal
Marginal
Marginal or Good
Low
Low
Low
Marginal
Bad
Very Low
Low
Low
Marginal
Marginal or Good
Very Low
Low
—
Good or Very Good
—
[Not Plausible]
Marginal
—
—
—
High or Very High
High
—
—
—
Very High
Table G.2.4 Model 2's Assessment of Saddam's
Options, Late July 1990
OPTION
CURRENT STATUS
LIKELY PROSPECTS
RISKS (WORST-CASE PROSPECTS)
OPPORTUNITY (BEST-CASE PROSPECTS)
NET ASSESSMENT OF OPTION
1. Coerce Kuwait
Very Bad
Bad
Very High
Marginal
Bad
2. Occupy part of Kuwait
Very Bad
Marginal
Very High
Good
Marginal
Conquer all of Kuwait
Very Bad
Very Good
Marginal
Very Good
Very Good
4. Invade Kuwait and Saudi Arabia
Very Bad
Very Bad
Very High
Very Good
Bad
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to cope with two, or conceivably three, very different
perspectives on how the opponent may be thinking.
FACTORS TENDING TO INCREASE RISK
TAKING
Since risk-taking propensity is such an important issue in
determining the probability of aggression, it is worthwhile to
review major factors tending to increase a willingness to assume
risk (Figure G.2.3). Starting at the top and moving clockwise, we
see first the previously mentioned role of the current situation.
The next factor is the degree to which the decision maker can make
decisions unilaterally, without broad discussion that might
mitigate perceptions and introduce new considerations. The next
factor is ambition. This is often underestimated in thinking about
adversaries in crisis and conflict. Status quo powers fairly
comfortable with their own circumstances are especially likely to
underestimate others' ambitions. So it is that Saddam Hussein was
erroneously assumed to be ''pragmatic" and to be merely looking for
a way to improve Iraq's economic situation "somewhat," when in fact
he had grandiose goals. Similarly, the United States applied
incrementalist compellence logic to Ho Chi Minh, when he was an
idealist revolutionary. Other factors include opportunities for
reaching important goals, the abstractness of risk factors (the
more abstract the risk factor, the more it may be underestimated by
someone who is yearning for action), pain, and the degree to which
the protagonist believes he is in control of events and therefore
able to "make his own luck." All of these factors should be
familiar from everyday life, supplemented by a knowledge of
history. It should perhaps be obvious that in applying the theory
described above, one considers the presence or absence of the
factors in Figure G.2.3 when estimating how a given type of
decision maker might judge the worst-case outcome of a given
option. One also uses these factors in judging which reasoning
models to employ (e.g., in choosing parameter values a, b,
and c, and rounding rules of equation 1, to correspond to
more or less risk aversion).
Figure G.2.3 Factors contributing to risk-taking
behavior.
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A GENERIC SITUATION ENCOURAGING
AGGRESSION
Let us now consider a sketch of how the theory applies to
real-world problems of defense planning and foreign policy. To do
so, consider first a decision table describing a remarkably generic
situation to be avoided, one in which aggression is possible and
deterrence is difficult. Table G.2.5 is the decision table that we
do not want potential aggressors to be implicitly using.
The salient features of this somewhat generic dangerous
situation are
• The perception that the current situation is very bad
(implicit in the conclusion that a continuation of peaceful
policies would have a very bad likely outcome);
• The perception that continuing current or other peaceful
policies will not improve the situation;
• The perception that mere coercion may have a payoff, but
not much, and might make things worse (e.g., by strengthening the
coalition of hostile interests and by causing the potential target
of aggression to increase its defenses); and
• The perception that military action is likely to pay off,
may pay off handsomely, and involves risks that are not outrageous
and perhaps only marginal.
• Importantly, national leaders have their own standards in
evaluating current situations and the outcomes of various options.
These often differ substantially from the standards that leaders of
other nations might expect. As suggested above, it is easy to
underestimate ambitions (and emotions) of adversaries by
