Multiscale decision making

Multiscale decision making, also referred to as Multiscale decision theory (MSDT), is a recently developed approach in operations research that fuses game theory, multi-agent influence diagrams, in particular dependency graphs, and Markov decision processes to solve multiscale challenges^[1] across organizational hierarchies, time, space (e.g., topology and geography), states (e.g., queues), and size (e.g., number of nodes, users).

Multiscale decision theory is a fusion between decision theory and multiscale mathematics. Multiscale decision theory can model and analyze hierarchical decision-making networks which exhibit multiscale phenomena. The theory's results can be used by mechanism designers and decision-makers in organizations and complex systems to improve system performance and individual payoffs.

Multiscale decision theory has been successfully applied to manufacturing enterprises^[2][3] and service systems^[4]. Current research focuses on identifying multi-level incentives to improve value in healthcare systems. Furthermore, researchers are applying multiscale decision theory to improve performance and reliability of power networks (electricity distribution), the Internet, homeland security and defense (military) systems.

Multiscale decision theory is related to:

• Multiscale modeling
• Decision analysis
• Cooperative distributed problem solving
• Decentralized decision making

References

1. ^ Multiscale Mathematics Initiative: A Roadmap
2. ^ Wernz, C., Deshmukh, A., Decision Strategies and Design of Agent Interactions in Hierarchical Manufacturing Systems, Journal of Manufacturing Systems, Vol 26 (2), pp. 135-143, 2007.
3. ^ Wernz, C., Deshmukh, A., Multiscale Decision-Making: Bridging Organizational Scales in Systems with Distributed Decision Makers, European Journal of Operational Research (in press).
4. ^ Wernz, C. and Deshmukh, A. Managing Hierarchies in a Flat World, Proceedings of the 2007 Industrial Engineering Research Conference (IERC), 2007

Bibliography

• Filar, J., Vrieze, K., Competitive Markov Decision Processes, Springer, 1996. ISBN 0-387-94805-8

• Mesarović, M. D., Macko, D. and Takahara, Y., Theory of Hierarchical, Multilevel, Systems, Mathematics in Science and Engineering, Volume 68, Academic Press, 1970. ISBN 0-12-491550-7

• Schneeweiss, C., Distributed Decision Making, Springer, 2003. ISBN 3-540-40201-2

• Wernz, C., Multiscale Decision-Making: Bridging Temporal and Organizational Scales in Hierarchical Systems, Dissertation, University of Massachusetts Amherst. http://scholarworks.umass.edu/dissertations/AAI3336994/

• Wernz, C., Deshmukh, A., Multiscale Decision-Making: Bridging Organizational Scales in Systems with Distributed Decision Makers, European Journal of Operational Research, Vol 202, pp. 828-840, 2010. http://dx.doi.org/10.1016/j.ejor.2009.06.022

External links

• Multiscale Mathematics Initiative: A Roadmap
• Multiscale Decision Making Laboratory, Virginia Tech
• Multi-Scale Behavioral Modeling and Analysis Promoting a Fundamental Understanding of Agent-Based System Design and Operation