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KR17 Risk Cube Data Biases
Author(s) -
Smith Eric D.,
Siefert William T.
Publication year - 2008
Publication title -
incose international symposium
Language(s) - English
Resource type - Journals
ISSN - 2334-5837
DOI - 10.1002/j.2334-5837.2008.tb00903.x
Subject(s) - cube (algebra) , value (mathematics) , psychology , econometrics , computer science , actuarial science , statistics , mathematics , economics , combinatorics
Risk cubes used in industry characterize particular risks in terms of the likelihood of occurrence, and the consequence of the actualized risk. Human cognitive bias research led by Daniel Kahneman and Amos Tversky exposed systematic translations of objective probability and value as judged by human subjects. An examination of industry‐generated risk cube data reveals evidence of biases in the judgment of likelihood and consequence. In addition, other biases – including a ‘diagonal bias’ – are revealed in the risk cube data. The evidence presented could improve risk cube based risk analysis.