Ignorance Is Not Probability

Authors


*Address correspondence to William A. Huber, Quantitative Decisions, 1235 Wendover Road, Rosemont, PA 19010; tel: (610)-527-3599; whuber@quantdec.com.

Abstract

The distinction between ignorance about a parameter and knowing only a probability distribution for that parameter is of fundamental importance in risk assessment. Brief dialogs between a hypothetical decisionmaker and a risk assessor illustrate this point, showing that the distinction has real consequences. These dialogs are followed by a short exposition that places risk analysis in a decision-theoretic framework, describes the important elements of that framework, and uses these to shed light on Terje Aven's criticism of nonprobabilistic purely “objective” methods. Suggestions are offered concerning a more effective approach to evaluating those methods.

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