Uncertainties in risk analysis: Six levels of treatment

This paper examines different levels of analytical sophistication in the treatment of uncertainties in risk analysis, and the possibility of transfer of experience across fields of application. First, this paper describes deterministic and probabilistic methods of treatment of risk and uncertainties, and the different viewpoints that shape these analyses. Second, six different levels of treatment of uncertainty are presented and discussed in the light of the evolution of the risk management philosophy in the US. Because an in-depth treatment of uncertainties can be complex and costly, this paper then discusses when and why a full (two-tier) uncertainty analysis is justified. In the treatment of epistemic uncertainty, an unavoidable and difficult problem is the encoding of probability distributions based on scientific evidence and expert judgments. The last sections include a description of different approaches to the aggregation of expert opinions and their use in risk analysis, and a recent example of methodology and application (in seismic hazard analysis) that can be transferred to other domains.

[1]  James K. Hammitt.  Probability is All We Have , 1990 .

[2]  F. O. Hoffman,et al.  Propagation of uncertainty in risk assessments: the need to distinguish between uncertainty due to lack of knowledge and uncertainty due to variability. , 1994, Risk analysis : an official publication of the Society for Risk Analysis.

[3]  Jon C. Helton,et al.  Treatment of Uncertainty in Performance Assessments for Complex Systems , 1994 .

[4]  G. Apostolakis.  The concept of probability in safety assessments of technological systems. , 1990, Science.

[5]  A. E. Green,et al.  High risk safety technology , 1982 .

[6]  B. M. Hill,et al.  Theory of Probability , 1990 .

[7]  Peter A. Morris,et al.  Combining Expert Judgments: A Bayesian Approach , 1977 .

[8]  D. E. Bell,et al.  Decision making: Descriptive, normative, and prescriptive interactions. , 1990 .

[9]  Robert T. Clemen,et al.  Calibration and the aggregation of probabilities , 1986 .

[10]  J. Houghton,et al.  Climate change : the IPCC scientific assessment , 1990 .

[11]  Y. Haimes,et al.  Risk-Based Decision Making in Water Resources V , 1992 .

[12]  W. Ruckelshaus.  Science, risk, and public policy. , 1983, Science.

[13]  Robert E. Melchers,et al.  Structural Reliability: Analysis and Prediction , 1987 .

[14]  Christian Genest,et al.  Combining Probability Distributions: A Critique and an Annotated Bibliography , 1986 .

[15]  S. S. Wilks,et al.  Probability, statistics and truth , 1939 .

[16]  M. G. Morgan,et al.  Subjective judgments by climate experts. , 1995 .

[17]  Paul S. Fischbeck,et al.  Probabilistic interpretation of command and control signals: Bayesian updating of the probability of nuclear attack: A reply , 1995 .

[18]  M. Paté-Cornell,et al.  A challenge to the compound lottery axiom: A two-stage normative structure and comparison to other theories , 1994 .

[19]  T. Fine,et al.  The Emergence of Probability , 1976 .

[20]  Alice S. Whittemore,et al.  Facts and Values in Risk Analysis for Environmental Toxicants , 1983 .

[21]  S. Kaplan,et al.  On The Quantitative Definition of Risk , 1981 .

[22]  Jon Kusler,et al.  Wetlands Delineation: An Issue of Science or Politics? , 1992 .

[23]  Carl-Axel S. Staël von Holstein,et al.  Exceptional Paper---Probability Encoding in Decision Analysis , 1975 .

[24]  Robert J. Budnitz,et al.  Recommendations for probabilistic seismic hazard analysis: Guidance on uncertainty and use of experts , 1997 .

[25]  Hung-po Chao,et al.  Managing the Risk of Global Climate Catastrophe: An Uncertainty Analysis , 1995 .

[26]  Lincoln E. Moses,et al.  Elementary Decision Theory , 1959 .

[27]  Ernest J. Henley,et al.  Reliability engineering and risk assessment , 1981 .

[28]  Gordon L. Hester,et al.  Electric & Magnetic: Fields Managing an Uncertain Risk , 1992 .

[29]  Paul S. Fischbeck,et al.  Aversion to Epistemic Uncertainties in Rational Decision Making: Effects on Engineering Risk Management , 1992 .

[30]  Adam M. Finkel.  Stepping out of your own shadow: A didactic example of how facing uncertainty can improve decision-making , 1994 .

[31]  Ronald A. Howard.  Uncertainty about Probability: A Decision Analysis Perspective , 1988 .

[32]  G. Parry.  On the meaning of probability in probabilistic safety assessment , 1988 .

[33]  M. Granger Morgan,et al.  Technical Uncertainty in Quantitative Policy Analysis — A Sulfur Air Pollution Example , 1984 .

[34]  J. W. Garner,et al.  Uncertainty and sensitivity analysis results obtained in a preliminary performance assessment for the Waste Isolation Pilot Plant , 1993 .

[35]  Division on Earth.  Risk Assessment in the Federal Government: Managing the Process , 1983 .

[36]  Murray Turoff,et al.  The Delphi Method: Techniques and Applications , 1976 .

[37]  B. John Garrick,et al.  Recent Case Studies and Advancements in Probabilistic Risk Assessment , 1984 .

[38]  M. E Paté-Cornell,et al.  Probability and uncertainty in nuclear safety decisions , 1986 .

[39]  D. Ellsberg.  Decision, probability, and utility: Risk, ambiguity, and the Savage axioms , 1961 .

[40]  Elizabeth L. Anderson,et al.  Quantitative Approaches in Use to Assess Cancer Risk , 1983 .

[41]  James H. Lambert,et al.  When and How Can You Specify a Probability Distribution When You Don't Know Much?1.: Organized by the U.S. Environmental Protection Agency and the University of Virginia, April 18-20, 1993, Charlottesville, Virginia , 1994 .

[42]  David Lindley,et al.  Introduction to Probability and Statistics from a Bayesian Viewpoint , 1966 .

[43]  R. Hogarth,et al.  Decision Making under Ambiguity , 1986 .

[44]  Robert L. Winkler,et al.  The Consensus of Subjective Probability Distributions , 1968 .

[45]  J. Neumann,et al.  Theory of Games and Economic Behavior. , 1945 .

[46]  James H. Lambert,et al.  RISK OF EXTREME EVENTS IN A MULTIOBJECTIVE FRAMEWORK , 1992 .

[47]  David E. Burmaster,et al.  Assessment of Variability and Uncertainty Distributions for Practical Risk Analyses , 1994 .

[48]  A. Tversky,et al.  Judgment under Uncertainty: Heuristics and Biases , 1974, Science.

[49]  L. J. Savage,et al.  The Foundations of Statistics , 1955 .

[50]  Reuven Y. Rubinstein,et al.  Simulation and the Monte Carlo Method , 1981 .

[51]  D. M. Rasmuson,et al.  Uncertainties in Nuclear Probabilistic Risk Analyses , 1984 .

[52]  William D. Nordhaus,et al.  Managing The Global Commons , 1994 .

[53]  Donald Boyce Davis.  The effect of ambiguity on lottery preferences , 1990 .