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Terje Aven University of Stavanger

Probability does not exists – but does risk exist? Why uncertainty should replace probability in the definition of risk. Terje Aven University of Stavanger. Risk and uncertainty: ontologies and methods University of Amsterdam, The Netherlands 23-25 January 2013. Kjerag bolt

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Terje Aven University of Stavanger

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  1. Probability does not exists – but does risk exist? Why uncertainty should replace probability in the definition of risk Terje Aven University of Stavanger Risk and uncertainty: ontologies and methods University of Amsterdam, The Netherlands 23-25 January 2013

  2. Kjerag bolt 1000 m down Peter is to jump onto the stone YES ! Does risk exist?

  3. Peter falls down A He is killed C Uncertainty U - the occurrence is unknown Inter-subjective Objective

  4. Statfjord A Does risk exist? YES !

  5. Government building Oslo 22 July 2011

  6. Risk (A,C,U) (C,U) A: Event, C: Consequences U: Uncertainty

  7. Risk description (A,C,U) (C,U) Q K C’ Q: Measure of uncertainty (e.g. P) K: Background knowledge C’: Specific consequences

  8. Risk perspective Probability-based Historical data Knowledge dimension Surprises + +

  9. The need for seeing beyond probability

  10. Subjective/knowledge-based probability K: background knowledge • P(A|K) =0.1 • The assessor compares his/her uncertainty (degree og belief) about the occurrence of the event A with drawing a specific ball from an urn that contains 10 balls (Lindley, 2000. Kaplan and Garrick 1981).

  11. Probability is a tool Person a: P(A) = 0.01 Person b: P(A) = 0.1 Probability is subjective - «it does not exist» (de Finetti)

  12. Does an objective probability exist ? x x x x x x x x x x x x x x Frequentist probability Not to reflect uncertainty but in some cases to reflect variation

  13. The need for seeing beyond probability

  14. P(head) = 0.5 P(attack) = 0.5 Strong knowledge Poor knowledge

  15. John offers you a game: throwing a die What is your risk? ”1,2,3,4,5”: 6 ”6”: -24

  16. Risk (C,P): • 6 5/6 • -24 1/6 Is based on an important assumption – the die is fair

  17. “Background knowledge” Assumption 1: … Assumption 2: … Assumption 3: … Assumption 4: … … Assumption 50: The platform jacket structure will withstand a ship collision energy of 14 MJ Assumption 51: There will be no hot work on the platform Assumption 52: The work permit system is adhered to Assumption 53: The reliability of the blowdown system is p Assumption 54: There will be N crane lifts per year … Assumption 100: … … Model: A very crude gas dispersion model is applied

  18. Risk concept cont. There is a need for seeing beyond the probabilities – must better cover the knowlede and lack of knowledge dimension

  19. A = leakage

  20. Mediocristan (Normalistan) • Extremistan (black swans) Nassim N. Taleb

  21. Threats Known unknowns Unknown unknowns (”black swans”) (A’, C’, Q, K)

  22. Analysis Management Risk analysis Cost-benefit analysis, Risk acceptance criteria … Management review and judgment Decision Risk-informed decision making

  23. Conclusions «Risk exists but not risk descriptions»

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