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10
Methods for eliciting
probabilities
Introduction
We have seen in earlier chapters that subjective probabilities provide a
concise and unambiguous measure of uncertainty and they are therefore
an important element of many decision models. A number of techniques
have been developed to assist the decision maker with the task of making
probability judgments and in this chapter we will examine some of the
more widely used methods.
At the end of the last chapter we gave advice on how to approach
probability estimation. This was based on recent research evidence that
people prefer to think in terms of the relative frequencies with which
events occur, rather than probabilities. Nevertheless, it may not always
be possible to assess frequencies for an event when there are no past
instances of that event or similar events occurring. Even when such
past frequencies do exist, some of the techniques we describe below
may be useful. For example, techniques that break the estimation task
into smaller parts or use graphs may both help to improve the quality
of judgments.
It has been found that these techniques are employed most effectively
when they are administered by an analyst who uses them as
part of an interview with the decision maker (see Spetzler and Stäel
von Holstein 1 and Shephard and Kirkwood 2 ). Of course, the assessment
process can be time consuming and therefore the importance of sensitivity
analysis cannot be overstated. It may reveal, for example, that
a very rough assessment of the probabilities in a problem is adequate
because the choice of a given course of action is valid for a wide range
of probability values. Towards the end of the chapter we will examine
the calibration of subjective probability estimates in depth and discuss
additional ways in which the process of probability assessment can
be improved.