2023-08-30
The expected utility is: \[ EU = p \cdot 100 - 1 \]
Would you buy a ticket in this lottery?
In this case you are to choose one out of two doors. Behind every door there is a chance of winning \(X\) with probability \(p\). Thus, each door is a lottery with the expected utility \(X\cdot p\).
A: \(0.25\cdot 100 = 25\) vs \(0.25\cdot 10 = 2.5\)
B: \(0.05\cdot 100 = 5\) vs \(0.75\cdot 10 = 7.5\)
C: \(0.05\cdot 100 = 5\) vs \(0.5\cdot 10 = 5\)
Impact on biodiversity is high
There is a 30% probability of rain tomorrow
Prominent in qualitative risk assessment due to the use of qualitative expressions
Can be avoided by using well defined questions, quantities and outcomes and meaningful scales
A tool from Mark and his colleagues to reduce linguistic uncertainty
Likelihood and impact scales
Rain - Rain tomorrow
Rocket - Next moon rocket crash on earth
Trump - Trump becomes the next president of USA
Use these likelihood and impact scales
Make judgements with single scores e.g. 3 or ranges, e.g. 2-4
Tutorial on uncertainty where Ullrika explains probability distribution
the frequency with which sampled values arise within a specified range or for a specified category
a quantification of a judgement on the likelihood of a particular range or category
Note
The mathematical theory for probability is the same for both interpretations!