Scenario analysis

From dKosopedia

A typical scenario analysis combines multiple scenarios that are each assigned a probability and maybe a contingency (other scenarios that enable them, creating a hierarchy of events) that results in a list of possible future situations.

All users of scenario analysis methods acknowledge that a fixed time horizon is required to meaningfully compare scenarios, e.g. a planning horizon, deadline or expiry/renewal date (for financial securities, in the case of scenarios used to make investment decisions).

Most users of the more advanced vision/threat/status form of scenario analysis advise that at least five scenarios must always exist:

• a vision or utopia that states something that is "too good to be true", impossible and unreasonable - it is probability 0. By requiring that it be beyond possibility, it frees up the imagination and lets people state their most insane or unreasonable projection - and requires anyone who actually believes the vision is possible, to say so, so as to force the vision to be made more extreme, and clarify what should be the:
• best case - the most extreme good outcome that at least one person will state that they believe is possible - if zero believe it possible, it's not a best case, it's a vision. A true best case has probability well under 1%.
• status quo or steady state - some statement of what is going on now, and the assumption that it will continue on into the future without change to any basic parameters; note that in some cases this is extremely improbable such as a large mass of troops on a border, or, an active internal civil war.
• 'worst case is the mirror of the best case, and may be the opposing side's best case, in a simple conflict situation. Analysis is from one side's perspective about what is "worst" or "best", which often mirrors each other. Again, at least one person participating must actually believe the worst case to be possible, but a true worst case is so bad it has a probability well under 1%.
• a threat or dystopia is a nightmare outcome that no one participating believes is possible. It may be the actual stated threat of a real opponent, which is not believed, or a "sky is falling" scenario that has been discarded as too unrealistic and not worthy of "serious" consideration. It is probability 0.

People unfamiliar with scenario analysis tend to think that spending most of the time on scenarios of probability 0 (vision, threat) or under 1% (best case, worst case) is a waste of time. Those who believe that should usually not be involved in scenario analysis, or simply consulted on the status quo scenario, or sent to do research on what "the enemy" says is possible, credible, likely. This research is extremely useful, as any student of military science is likely to know. And, if nothing else, it gets these people out of the way.

If strong factions develop that seem to have very different views of what is "best" or "worst", usually additional scenarios can simply be added. It isn't necessary to agree on a single vision, best, status, worst, threat scenario - some scenario analysts advise having dozens of scenarios of every kind, and in some cases, assigning "probability 0" scenarios a nominal probability of 0.1% or even 1% on the assumption that people tend to underestimate the probability of extreme events with which they are unfamiliar (and overestimate that with which they are familiar). People who assign the status quo a 100% probability of just continuing forever, have a special name: these people are called the stupid.

Even with two absolutely opposing factions, it is possible to remove the labels and simply include both sides' scenarios with only coded names, or objectively descriptive names (like "China invades USA 2020" or "USA breaks up 2020", etc.) so that all the things that might happen by 2020 are all on one gigantic list.

Given that so many people all over the world, with all kinds of perspectives, pay more attention to American politics than any other politics (other than perhaps the Mideast's), this might be extremely illustrative to attempt some day.

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