By Joseph Guillaume
Prediction under uncertainty is typically seen as a daunting task. It conjures up images of clouded crystal balls and mysterious oracles in shadowy temples. In a modelling context, it might raise concerns about conclusions built on doubtful assumptions about the future, or about the difficulty in making sense of the many sources of uncertainty affecting highly complex models.
However, prediction under uncertainty can be made tractable depending on the type of prediction. Here I describe ways of making predictions under uncertainty for testing which conclusion is correct. Suppose, for example, that you want to predict whether objectives will be met. There are two possible conclusions – Yes and No, so prediction in this case involves testing which of these competing conclusions is plausible. Continue reading