probability does not exists – but does risk exist? why uncertainty should replace probability in...
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Probability does not exists – but does risk exist?
Why uncertainty should replace probability in the definition of risk
Terje Aven
University of Stavanger
Risk and uncertainty: ontologies and methods
University of Amsterdam, The Netherlands23-25 January 2013
Peter is to jump onto the stone
Kjerag bolt
1000 m down
Does risk exist? YES !
Peter falls down A He is killed C
Uncertainty U - the occurrence is unknown
Inter-subjective Objective
Statfjord A
Does risk exist? YES !
Government building Oslo 22 July 2011
Risk
(A,C,U)
A: Event, C: Consequences
U: Uncertainty
(C,U)
Risk description
(A,C,U)
Q: Measure of uncertainty (e.g. P)
K: Background knowledge
C’: Specific consequences
(C,U)
C’
Q
K
Probability-based
Historical data
Probability-based
Historical data
Knowledge
dimension +
+
Surprises
Risk perspective
The need for seeing beyond probability
Subjective/knowledge-based probability
• P(A|K) =0.1
• The assessor compares his/her uncertainty (degree
og belief) about the occurrence of the event A
with drawing a specific ball from an urn that
contains 10 balls (Lindley, 2000. Kaplan and Garrick 1981).
K: background knowledge
Probability is a tool
Person a: P(A) = 0.01
Person b: P(A) = 0.1
Probability is subjective -
«it does not exist» (de Finetti)
Does an objective probability exist ?
• Not to reflect uncertainty but in some cases to
reflect variation
x x x x xx x x x x x x x x
Frequentist probability
The need for seeing beyond probability
P(head) = 0.5
P(attack) = 0.5
Strong knowledge
Poor knowledge
John offers you a game: throwing a die
• ”1,2,3,4,5”: 6
• ”6”: -24
What is your risk?
Risk
(C,P):
• 6 5/6
• -24 1/6
Is based on an important
assumption – the die is fair
Assumption 1: …Assumption 2: …Assumption 3: …Assumption 4: ……Assumption 50: The platform jacket structure will withstand
a ship collision energy of 14 MJAssumption 51: There will be no hot work on the platformAssumption 52: The work permit system is adhered toAssumption 53: The reliability of the blowdown system is pAssumption 54: There will be N crane lifts per year…Assumption 100: ……
“Background knowledge”
Model: A very crude gas dispersion model is applied
Risk concept cont.
• There is a need for seeing beyond the
probabilities – must better cover the
knowlede and lack of knowledge dimension
•Mediocristan (Normalistan)
•Extremistan (black swans)
Nassim N. Taleb
Threats
Known unknowns
Unknown unknowns(”black swans”)
(A’, C’, Q, K)
Risk analysisCost-benefit analysis,
Risk acceptance criteria
…
Managementreview and judgment
Decision
Analysis Management
Risk-informed decision making
Conclusions
• «Risk exists but not risk
descriptions»