Models and methods in motion: Declining the dogma dance

I take a communicative pragmatist and realist approach to futures studies. This implies a sensitivity to understanding what the audience can absorb and using futures methods effectively to create spaces for new futures. While Wilber's work affords us with new insights to engage with methodology, is not the only path. Indeed, it is intellectual bigotry to demand that everyone master the tools one personally deems most appropriate. Critical conversations about futures must remain open, where post-modernist and integral thinking widen our horizons, they are welcomed, where they straitjacket our thoughts, they are not.     

Learning ahead of time: how evaluation of foresight may add to increased trust,organizational learning and future oriented policy and strategy

Evaluation of futures research (foresight) consists of three elements: quality, success, and impact of a study. Futures research ought to be methodologically and professionally sound, should to a certain extent be accurate, and should have a degree of impact on strategic decision making and policy-making. However, in the case of futures studies, the one does not automatically lead to the other. Quality of method does not ensure success, just as quality and success do not guarantee impact. This article explores the new paths for understanding evaluating of futures studies that are provided by the various articles in this special issue and sets out an agenda for next steps with regard to evaluation of futures research. The more structural and systematic evaluation can result in an increased level of trust in futures research, which may in turn lead to more future oriented strategy, policy and decision making. Therefore, evaluation should be seen as more than a burden of accountability – albeit important as accountability is – but as an investment in the credibility and impact of the profession. It may set in motion a cycle of mutual learning that will not only improve the capacity of futures-researchers but will also enhance the capacity and likeliness of decision-makers to apply insight from futures research.     

Researching the future: method or madness?

This paper examines the methodological issues behind futures studies, questioning whether it is possible to claim a futures study as methodologically ‘sound’, and critiquing how futures methodology fits within the methodological paradigms currently recognised in the research field. The extent to which futures methodology can be considered a paradigm in its own right is also examined as are the assumptive foundations of futures studies. While all the evidence raises many questions as to the form of futures methodology, the lack of clarity does not make a futures study invalid or unreliable, and hence sensemaking from the chaos of futures ‘data’ does ensure that futures studies can be based on method rather than madness.

How does one research the future? The very notion of researching the future is a paradox. The word research lies within the time boundaries of the past and the present so to research the future appears a logical impossibility. Attempts to ground the methodology in any single paradigm or set of constructs proves a fruitless task. Indeed, it becomes apparent that when undertaking research into an area that is something new, in the future, which could constitute a new field of research, fundamentally a new methodology needs to be created. This paper discusses how the development of a futures methodology is an on-going process which cannot be bounded by the limitations of strict rigour, but is nevertheless a rigorously sound approach to carrying out research.

When researching the future, no one method is appropriate in isolation. While quantitative methods such as forecasting, extrapolation and time series may prove useful if there is raw numerical data to work with, a hypothesis cannot be tested and proven as is the case in many quantitative studies. Given the nature of ‘the future’ itself, raw quantitative analysis needs contextualising and interpreting in light of the assumptive future constructs, and the assumptions themselves need examining for ‘assumption drag’ so that underlying trends and wave patterns are accounted for [1].     

A Generalisation of the Mean-Variance Analysis

In this paper we consider a decision maker whose utility function has a kink at the reference point with different functions below and above this reference point. We also suppose that the decision maker generally distorts the objective probabilities. First we show that the expected utility function of this decision maker can be approximated by a function of mean and partial moments of distribution. This 'mean-partial moments' utility generalises not only mean-variance utility of Tobin and Markowitz, but also mean-semivariance utility of Markowitz. Then, in the spirit of Arrow and Pratt, we derive an expression for a risk premium when risk is small. Our analysis shows that a decision maker in this framework exhibits three types of aversions: aversion to loss, aversion to uncertainty in gains, and aversion to uncertainty in losses. Finally we present a solution to the optimal capital allocation problem and derive an expression for a portfolio performance measure which generalises the Sharpe and Sortino ratios. We demonstrate that in this framework the decision maker's skewness preferences have first-order impact on risk measurement even when the risk is small.     

The review process as a control for differential recall of evidence in auditor judgments

This experiment examines whether there are systematic offsetting differences in the manner in which initial decision makers and reviewers attend to information which ensure that evidence inconsistent with initial judgments is given adequate consideration. Differences in attention are proposed, which result in differential recall of evidence by the initial decision maker and reviewer and thus influence what knowledge initial decision makers and reviewers bring to their discussions and subsequent decisions. The results suggest that the review process can act as an effective control by increasing the chances that the implications of inconsistent evidence are considered.     

The future of futures decision making

At the dawn of a new millennium, with the past one thousand years ready for reflection and the up-coming one thousand years primed for exciting new adventures, humankind seems to be trapped in the box of myopic, short-term decision making. Voices pleading to expand the horizons of our decision making to ensure sustainability of our species and countless other species on this earth are currently drowned out by a cacophony of voices trumpeting economic globalization, rapid technology development, and real-time financial markets. While futures decision making is not much in evidence today, the question addressed by this paper is whether futures decision making is even possible. Are there inherent constraints in our ability to make decisions that encompass time frames covering centuries if not millennia? An enormous amount of research has been conducted in the general area of decision making over the past several decades. Much has been learned about the psychology of human decision making and decision making within organizations. Countless methods have been developed to guide decision making. Recent work in areas such as imprecise probability and complex adaptive systems is beginning to provide boundaries as to what can be known about the future. This paper reviews much of this diverse literature and synthesizes important research findings across several disciplines to identify numerous significant barriers to futures decision making. The paper presents several recommendations on how to improve futures decision making in the future.     

A systemic evaluation framework for futures research

Evaluation of futures studies is a topic that has frequently aroused discussion. Futures studies often deal with great societal or strategic business issues, and thus the validity and reliability of the results is of great interest to stakeholders. Existing literature contains discussions of such important issues as ethics of futures studies, the nature of knowledge about the future, and futures methodology, which together contribute to the quality, validity and credibility of futures studies, but discussion on the evaluation of futures studies is more scant.Thus, the main research question that guides our study is: “how should we evaluate futures studies to ensure the reliability and credibility of the results?” We answer the question by deriving a systemic framework for evaluation following the input-process-output schema to ensure that the whole chain from the data to reporting and implementation contributes to the quality and impact of the study.The main contribution is the systemic evaluation framework. The framework will contribute to the evaluation of existing and ongoing studies by offering guidelines for evaluation, and as a net effect, we propose, it will increase the impact of futures studies by making the practices more transparent and thus generating more confidence in the results.     

On applied science, prediction and contingency

Like any other science, to remain a worthwhile scientific discipline, futures research needs to reflect on itself. It needs to do so from three perspectives: 1) futures research is regarded as an applied science: a closer connection between studying the future in an academic manner and conducting futures research can improve the quality and subsequently the use and impact of futures research, since this will set a cyclic process between theory and practice in motion. An important condition for ensuring this is to increase the amount of empirical research concerning the way futures research is carried out in real life; 2) a reappraisal of predicting the future: although history has shown that predicting the future is difficult, stating that, in the future, predictions will not be a part of futures research is in itself a prediction. In fact, predictions can serve as valuable starting points for discourses on the future; 3) the context of futures research: futures researchers should be more aware of the context in which they do their work. This can significantly enhance the usability of futures research but it also means that futures researchers should become more flexible in applying their methods and processes.     

Combining backcasting and adaptive management for climate adaptation in coastal regions: A methodology and a South African case study

Developing adaptation strategies for deltaic and coastal regions is a major challenge, due to future uncertainties of climate change and complexity of the social–ecological systems to be managed. This paper investigates how desirable futures or normative scenarios approaches, in particular backcasting, can be used to develop more robust climate strategies in coastal regions. The paper develops a methodology in which participatory backcasting and adaptive management are combined, and its applicability is demonstrated for the Breede–Overberg coastal region in South Africa where a catchment management strategy has been developed. It is concluded that the methodology offers an adequate framework for developing and implementing long-term climate adaptation strategies and policies, including a transition management scheme for intermediate assessments.     

The Value of Personal Contact in Marketing Insurance: Client Judgments of Representativeness and Mental Availability

Much previous research in decision analyses has focused on the processes of simplification that the decision maker applies in order to obtain a reduced set of alternatives. In the present work, we show how the principles of judgment by representativeness and mental availability can be applied to insurance decisions. We extend this view by considering interaction between these two heuristics and by analyzing the effect of the longer time horizon typical for insurance problems. The results of such simplification are shown to be inherently unstable. Nevertheless, it is possible to explain on the basis of our analysis why certain marketing practices dominate insurance markets.     

The volatility effect of futures trading: Evidence from LSE traded stocks listed as individual equity futures contracts on LIFFE

This study investigates the impact of LIFFE's introduction of individual equity futures contracts on the risk characteristics of the underlying stocks trading on the LSE. We employ the Fama and French three-factor model (TFM) to measure the change in the systematic risk of the underlying stocks which arises subsequent to the introduction of futures contracts. A GJR-GARCH(1,1) specification is used to test whether the futures contract listing affects the permanent and/or the transitory component of the residual variance of returns, and a control sample methodology isolates changes in the risk components that may be caused by factors other than futures contract innovation. The observed increase (decrease) in the impact of current (old) news on the residual variance implies that futures contract listing enhances stock market efficiency. There is no evidence that futures innovation impacts on either the systematic risk or the permanent component of the residual variance of returns.     

Genetic enhancement, futures tense

This article reviews central developments on the intersections of genetics research, genetic counselling and bioethics that, in the 1970s and 1980s came together in the construction of the genetic decision maker through an “enhancement imaginary”. It argues that this image of genetic decision making, along with emerging socio-economic developmental traits in the West, will come under increasing pressure. This will generate the need for an up-scaled decision making complex, incorporating digital means and cognitive science in contexts increasingly outside of health care institutions. The handling of information, identity and decision making under changing and complex circumstances becomes central. Such developments raise concerns about, simultaneously, increasing surveillance, social inequality and exclusion, and emerging expert/lay relations. New attitudes, institutions and forms of knowledge are needed to meet emerging genomic futures in constructive ways.     

Some reflections on the high expectations as formulated in the Internet Bubble era

Since the breakthrough of the Internet to the broader public in the 1990s, expectations of the converging information technology, telecommunication and media industries and technologies as a catalyst for economic growth and social welfare have been high. Futures scientists were involved in predicting the future of these technologies during the Internet bubble. In this paper, we use a meta-analysis approach to examine how well futures studies have been able to describe future reality. We limit our studies to futures research in the ICT and Internet domain that were published between 1995 and 2000. Because the number of relevant studies can hardly be called impressive, we selected a number of available futures studies that were conducted by official government bodies and individual companies, based on various approaches, ranging from technology forecasts [1] to highly creative visions [2], and from predictions [2] to essays [4]. These studies were carried out by Dutch as well as by international organizations. Based on a framework we developed for the analysis of business models, we wanted to see whether technological drivers, regulatory/policy issues and market development as well as competitive behavior, on the input side, and the way value for customers and providers is provided, on the output side, were discussed. Our analysis made it clear that, looking back with what we know now about business models, futures studies and recently developed tools like road mapping, developments in futures studies have made tremendous progress since the Internet Bubble. However, here is still room for more rigor when it comes to methodology and reporting. More recently, there has been a promising integration of scenario analysis and business model approaches that opens new avenues for futures studies.     

Learning with futures to realise progress towards sustainability: The WBCSD Vision 2050 Initiative

This paper addresses the limited evidence of how futures work bears fruit in the present by exploring a specific, yet significant, empirical case study. The results of our longitudinal study into the WBCSD Vision 2050 Initiative shed light on how organisations are harnessing the perspective of the long term future to identify what can and should be done in the near term to keep progress towards sustainability on track. We provide evidence of the expected and realised benefits of this collaborative futures initiative. These benefits extend beyond direct decision support, manifest at multiple levels and vary over time. We note that shift from single client to collaborative futures work is inherent to addressing sustainability challenges and call for more research into how collaborative futures practices are evolving to deal with new puzzles and wicked problems.     

Extreme co-movements and extreme impacts in high frequency data in finance

Extreme co-movement and extreme impact problems are inherently stochastic control problems, since they will influence the decision taken today and ultimately influence a decision taken in the future. Extreme co-movements among financial assets have been reported in the literature. However, extreme impacts have not been carefully studied yet. In this paper, we use the newly developed methodology to further explore extreme co-movements and extreme impacts in financial market. Particularly, two FX spot rates are studied. Based on the results of our analysis with FX returns, we conclude that there exist extreme co-movements and extreme impacts in FX returns and care has to be taken when we employ portfolio optimization models, especially models without the ability of handling extreme dependencies.     

Bridges over troubled waters: Observations on the futures work of Eleonora Masini

It is really an expedition to study the work of a person you think you somehow know. In this commentary I try to apply my female point of view into the work of Eleonora Masini, one of the most outstanding female futures researchers and a person who has left a deep footprint in the futures research culture of our planet. The material is vast and, for me, the more impressive the unknown continents of the work of this bridge builder seems the more one learns. The areas which I try to cover are first her work as bridge builder among futures researchers as well as between researchers and activists from every continent. Basically this work seems to maintain threads of a global aspect and an ethical touch and creates forums where people can have discussions on an equal basis. This approach has much in common with the principles of the Club of Rome where she was invited as one of the first female members of the club. As a bridge builder for female futures researchers and activists she has gifted a great model through her own activity; she has educated and encouraged lots of women in the field. To give a futures perspective, I discuss a few of those problems she has brought up, but which have not been discussed as much as they deserve. The problems I pose are, first, the division between the culture of care and the culture of control, by now also divided into the female and the male culture. The dominance of the culture of control has caused the problem of useless people. Second is the role of everyday life and households in the world economy. The third is that futures studies has neglected to study the everyday futuring or anticipation of ordinary people. The fourth problem concerns the missing discussion about the future in terms of feminine worldviews.     

“Every today was a tomorrow”: An integral method for indexing the social mediation of preferred futures

The visions we hold of the future, whether they are of utopias or dystopias, are not simply a matter of personal imagination. Our conceptions of the future are mediated to us as much as they are privately created by us. To this point, futures studies have not developed an integrative and broad-based framework for considering the social mediation of futures. Understanding how social mediation impacts on our futures visioning requires an interpretive framework that can cope with the multilayered nature of futures visions, the worldviews that are associated with them and a theory of mediation that can be applied within such a context of ‘depth’. Using theory-building methodology, the current paper attempts this task by describing a theory of social mediation that builds on the integral futures framework. An application of the framework explores the relationship between various scenarios of health care futures, their associated worldviews and the mediational factors that influence our visions of future health care systems.     

Integrating Logical Inference with Numeric Optimization

OR and AI techniques have progressed separately without adequate interactions although they can benefit from each other's complementary strengths: OR in efficient mathematical computation and AI in domain-specific knowledge representation. Constraint Logic Programming (CLP) is introduced as a problem- solving tool which combines these complementary strengths. CLP uses predicate logic for knowledge representation, thus providing stronger expressive powers than prepositional logic, which is employed by mathematical programming. In addition, CLP allows numeric optimization with a computational efficiency comparable to OR approaches. This integration of logical inference and mathematical computation fits well into a special class of decision problems that requires not only logical inference on domain-specific knowledge but also numeric optimization through mathematical formulation. A production planning problem is introduced and solved by CLP. The results are compared with an implementation by mixed integer programming to show the advantages of the integration of OR and AI approaches over either one used alone.     

基于波动效应与价格发现的期指仿真交易研究

沪深300股指期货仿真交易的推出,对我国现货市场的影响如何以及这种影响是否有利于现货效率的改进。首次采用修正的GARCH模型和向量误差修正模型（VEC）将股指期货推出后现货市场波动性的变化和股指期货与现货市场的价格发现功能结合起来进行对比研究。结果表明,期指仿真交易的推出对于现货市场效率的改进确实存在正面的影响。其引入在短期内加大了现货市场的波动,但这一波动正是市场信息流动加速的反映,因而提高了市场信息的传递效率。同时期货价格领先于现货价格,存在由期货市场到现货市场长期的单向因果关系,说明期货价格具有引导现货价格向均衡方向调整的功能,从而在经验上支持了股指期货市场的开放政策。     

Increase in Risk and its Effects on Welfare and Optimal Policies in a Dynamic Setting: The Case of Global Pollution

This paper studies the effects of an increase in risk on welfare and optimal policies in a stochastic dynamic model of global pollution. In a first step, we focus on the case of a single decision maker, and make use of an approach pioneered by Kimball (2014) for studying the impact of a marginal change in risk in optimal stochastic control models. Using a simple model with only one state variable and one control variable, we show how the optimal carbon tax responds to an increase in risk. It is found that the third derivative of the decay function of the stock of pollution may play a decisive role. In a second step, we investigate the extent to which Kimball’s approach may be extended to the case of stochastic dynamic games. We show how strategic interactions complicate the task of evaluating the effects of an increase in risk. Interestingly, in a dynamic model of the tragedy of the commons, we find that an increase in risk can increase welfare even though all agents are risk averse. The reason is that higher risk can cause agents to be more conservative, and this mitigates the tragedy of the commons.