In an era of declining defense budgets, it is critical to base budget-related decisions on careful economic analysis of the alternatives. Building sound and comprehensible models to support effective decision making is a demanding and expensive process. This research will develop tools to facilitate constructing and understanding such models based on sound decision-theoretic principles and clear graphical representations. Specifically, we will develop 1) a representation based on influence diagrams for extensible, reusable model components; 2) a library facility for storage and retrieval of these components, accessible world-wide via the Internet; 3) tools to identify, adapt, and assemble these components to create new models; and 4) automatic methods to generate clear explanations of the assumptions and reasoning that underlie model recommendations, using graphics and natural language. The effectiveness of these tools will be demonstrated by their application to a number of budget-related decisions for Department of Defense. Anticipated
Benefits: The product to be developed will let decision-theory and economic models be created much more easily and inexpensively than is currently possible to improve the quality of budget-related decision making in US Government and business.