R7 PM Uncertainty Analysis in Risk Assessment: Influences on Decision-making
Thursday, 17 November 2005: 1:50 PM - 5:30 PM in 327-329

(VON-1117-724195) Admitting to Uncertainty Undermines the Decision and other Uncertain Myths.

von Stackelberg, KE¹, ¹ Menzie-Cura & Associates, Inc., Winchester, MA, USA

ABSTRACT- The goal of uncertainty analysis is to make the risk assessment process more transparent by acknowledging and, to the extent possible, quantifying the inherent uncertainties. Unfortunately, sometimes it has just the opposite effect. Uncertainty analyses, particularly (multi-dimensional) probabilistic analyses can be difficult to communicate and consequently understand. It sometimes appears as though every parameter is more uncertain than not, making it difficult to justify a decision and defend it publicly, and obscuring the real message. However, not acknowledging the uncertainties inherent in any analysis is at best foolish and at worst dangerous by providing a false sense of confidence that this is "the number". By identifying sources and magnitude of uncertainties, decisionmakers can determine whether additional information should be obtained prior to making a decision, and provides a quantitative context particular individual results. This paper presents the advantages of uncertainty analysis, some strategies for overcoming "uncertainty analysis paralysis," and identifies specific questions managers and decisionmakers should ask regarding any analysis.

Key words: uncertainty, risk assessment, risk management