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Decision Making Techniques Using Risk Information
| Content Provider | Scilit |
|---|---|
| Author | Modarres, Mohammad |
| Copyright Year | 2016 |
| Description | There are two classes of decision making methodologies: economic and noneconomic. An- other useful division is descriptive and normative theories of decision making. Descriptive theory of decision making represents preferences of individuals as they are. However, nor- mative theories model individual's beliefs structure following certain rules of consistency. As these are controversial views, we only discuss economic and noneconomic division in this book. The economic methodologies make the decisions based on a value (actual measurable monetary value or subjective value) assigned to risk (or loss). This value can be absolute or relative. Examples of economic-based methods that will be addressed in this chapter are cost- benefit, cost-effectiveness, and risk-effectiveness methods. The noneconomic methodologies include those that assign a value by experts or lay people to risk and other risk management attributes such as cost and time. These values can be real measurable ones (such as losses incurred by natural events), or values perceived by people as to the frequency or consequence of certain events. Examples of these methods are loss of life expectancy, comparison to natural risks, and expressed preference methods. Similar to the economic methodologies, the values assigned to risk can be either relative or absolute. The noneconomic methods may involve value judgments that assign (mostly subjective) values to the risk (frequency and consequence) and benefits. Noneconomic methods that will be discussed in this chapter are exceedance analysis, value analysis, decision tree, and analytical hierarchy process (AHP). Book Name: Risk Analysis in Engineering |
| Related Links | https://content.taylorfrancis.com/books/download?dac=C2006-0-11329-3&isbn=9780429114663&doi=10.1201/b21429-10&format=pdf |
| Ending Page | 348 |
| Page Count | 30 |
| Starting Page | 319 |
| DOI | 10.1201/b21429-10 |
| Language | English |
| Publisher | Informa UK Limited |
| Publisher Date | 2016-04-27 |
| Access Restriction | Open |
| Subject Keyword | Book Name: Risk Analysis in Engineering Decision Making |
| Content Type | Text |
| Resource Type | Chapter |
