DECISIONS UNDER RISK AND UNCERTAINTY

The principles involved and the procedure to be taken in the assessment of risk and uncertainty are explained with the aid of decision trees in a simple sample. Decisions are of two kinds, with different representation in the tree: those taken by the organisation, and those taken by nature or others. The method used for drawing a tree is explained. Forecasting the result of a decision can seldom be accomplished with absolute accuracy. The author shows how risk is related to the probability of a number of outcomes, and uncertainty occurs where the risk of alternative outcomes are not calculable. Uncertainty decisions must always be taken in the light of the nature of the likely outcome. An explanation is given of the use of the risk/utility relationship where no probabilities are available. The example shows how the decision tree is used to give the risk and net gains for various decision paths. /TRRL/

  • Availability:
  • Corporate Authors:

    Whitehall Technical Press Limited

    Wrotham Place
    Wrotham, Sevenoaks, Kent ME14 1PE,   England 
  • Authors:
    • BRIDLE, R J
  • Publication Date: 1978-8-9

Media Info

  • Features: Figures;
  • Pagination: p. 22-23
  • Serial:
    • Highway Engineer
    • Volume: 25
    • Issue Number: 8/9
    • Publisher: Whitehall Press Limited
    • ISSN: 0306-6452

Subject/Index Terms

Filing Info

  • Accession Number: 00189544
  • Record Type: Publication
  • Source Agency: Transport and Road Research Laboratory (TRRL)
  • Files: ITRD, TRIS
  • Created Date: Apr 12 1979 12:00AM