Graham Jeffery’s Blog

A natural hedge arises when a business invests in two different assets or business units where the cash flows from each cancel out some particular risk. When things go bad for one, they go well for the other, and vice versa.

Yin-yang is the set of concepts (usually a pair) that, although different, cannot exist without each other (eg, light and darkness, good and bad)—from the Chinese terms for male and female. The term also refers to the two sides of an issue.

See also: context and stationarity.

A wizard is a mythical character who can change the future, usually for a fee, provided he is given a well-defined request (one that passes the clarity test). The concept of the wizard is useful in decision analysis for assessing deterministic preferences by eliminating the complexity added by uncertainty. Calling on the wizard in a meaningful manner is subject to important restrictions (about the nature of free will and the meaning of counterfactual statements).

See also: assessment, clairvoyant, context, outcome and value of control.

In an intelligent decision system, the wisdom base is that portion of its knowledge that embodies fundamental—and, hence, portable—principles (ie, norms) of good decision-making. The system’s wisdom base is distinguished from its more traditional knowledge bases, which contain domain-specific knowledge.

See also: context, decision analysis, normative and stationarity.

A well-formed partial relevance diagram (WFPRD) is a subset of the nodes in a relevance diagram that meets the criteria for a well-formed relevance diagram.