Downloadable - About University

Preparing for probability assessment 279
will probably find it easier to give two separate assessments: one based
on the assumption that the collaboration takes place and the other on
the assumption that it does not.
Conditioning
The objective of this phase is to identify and thereby avoid the biases
which might otherwise distort the decision maker’s probability assessments.
It involves an exploration of how the decision maker approaches
the task of judging probabilities. For example, are last year’s sales figures
being used as a basis for this year’s estimates? If they are, there may
be an anchoring effect. To what extent are the assessments based too
heavily on the information which is most readily available, such as
yesterday’s news, without taking a longer-term view? More generally,
the heuristics and biases identified in Chapter 9 should be borne in mind
by the decision analyst as he works through the assessment process with
the decision maker.
Assessment methods
A number of different methods have been developed for assessing
probabilities. Some of these require a direct response from the decision
maker in the form of a probability or quantity, while others allow the
probability to be inferred by observing the decision maker’s choice
between bets.
Assessment methods for individual probabilities
Direct assessments
The simplest way to elicit a probability from a decision maker is to
pose a direct question such as ‘What is the probability that the product
will achieve a break-even sales level next month?’ Unfortunately, many
people would feel uncomfortable with this sort of approach, and they
might be tempted to give a response without sufficient thought. Asking
the individual to mark a point on a scale which runs from 0 to 1 might
be preferred because at least the scale enables the probability to be
envisaged. Other people prefer to give their assessments in terms of
odds which can then be easily converted to probabilities, as we showed