Improving Scenario Discovery Using Orthogonal Rotations
Published in: Environmental Modelling and Software, v. 48, Oct. 2013, p. 49-64
Posted on RAND.org on September 26, 2013
Scenario discovery offers a new means to characterize and communicate the information in computer simulation models under conditions of deep uncertainty. The approach first defines scenarios as the future states of world where a proposed policy fails to meet its goals and then uses statistical algorithms to find concise descriptions of such regions in large databases of simulation model results. Current scenario discovery applications rely on the Patient Rule Induction Method (PRIM), a user-interactive bump-hunting algorithm that identifies hyper-rectangular regions in the input space of the simulation model. While often successful, scenario discovery applications have been limited because in general a policy's vulnerabilities are not well described by the PRIM's hyper-rectangular regions. This study proposes and evaluates improved scenario discovery algorithms that address this challenge with a Principal Component Analysis (PCA)-based preprocessing step that transforms the original model input parameters so that PRIM can then identify high quality hyper-rectangular scenarios in the new rotated coordination system. We explore two versions. PCA-PRIM allows rotations among all uncertain model input parameters and CPCA-PRIM (for constrained PCA-PRIM) only allows rotations among parameters within user-specified domains. The latter may provide more useful information to users, who may find scenario axes described by linear combinations of related domain parameters more interpretable than combinations of dissimilar parameters. We run two sets of tests on the PCA-PRIM and CPCA-PRIM algorithms, the first using simulated test date and the second results from a model used in a previous RAND study of the cost-effectiveness of renewable energy portfolio standards. We find that the new algorithms produce higher quality scenarios than PRIM alone as evaluated by several important measures of merit. In the test data, PCA-PRIM produces improvements averaging 37 percent, and CPCA-PRIM averaging 14 percent, over PRIM alone. In the renewable energy policy case study, PCA-PRIM and CPCA-PRIM exhibit similar improvements of about 16 percent over PRIM, and CPCA-PRIM generates scenarios interpretable by, and that provide useful information to, decision makers.