Final Program - Society for Risk Analysis

W1-F.1 Hamilton M, Lambert J, Linkov I; mcg7w@virginia.eduUniversity of VirginiaIDENTIFICATION, PRIORITIZATION, AND MANAGEMENT OFRISKS FOR ENERGY SYSTEMS ACQUISITION AND PORTFOLIO OFASSETSThere is an urgent need for improving reliability, efficiency, conservation, andenvironmental protection for energy systems at a range of industrial and militaryinstallations. Stakeholders of energy investments are faced with a complex asset managementchallenge. Using traditional finance theory such as a discounted cash flow toanalyze capital investments in energy does not properly account for intangible benefitsthat are difficult to monetize such as environmental benefits, risk reduction, andmany others. Furthermore, while new technologies offer themselves continually, theinvestment rationale is complicated by deep uncertainties including technology, environment,regulatory, socio-demographic, political, economic, and many others thatmay effect the lifecycle valuation and resource requirements associated with variousinvestment alternatives. This motivates the need for an evidence-based, systematicprocess to identify and assess the implications of future emergent conditions andstakeholder perspectives. This research focuses on identification, ranking, and managementof risks to energy assets through a multi-layer approach. First, a multiplecriteria processor of emergent conditions and scenarios is used to identify whichcombinations of emergent conditions are the most pivotal to the valuation of energyinvestments at installations. The multiple criteria are generated from both installationmissions and energy conservation and sustainability goals. Next, lifecycle cost analysisis performed for key scenarios identified in the previous step to determine whichcombinations of emergent conditions have the largest impacts across the investmentlifecycle. The research describes lessons for energy managers, systems analysts, andrisk managers who are engaged with comparison and selection of energy technologies.A case study is presented concerning several options for investment at a militaryinstallation with multiple criteria.M4-I.2 Hammitt JK, Zhang Y; jkh@harvard.eduHarvard UniversityCOMBINING EXPERTS’ JUDGMENTS: COMPARISON OF ALGO-RITHMIC METHODSExpert judgment (or expert elicitation) is a formal process for eliciting judgmentsfrom subject-matter experts about the value of a quantity, such as an input toa risk-assessment model. Experts provide judgments in the form of subjective probabilitydistributions for the quantity of interest. Judgments are typically solicited fromseveral experts, raising the question how best to combine the information from multipleexperts. A number of algorithmic approaches have been proposed, of which theone most commonly employed is the equal-weight combination, a simple unweighted112average of the experts’ distributions. We evaluate the properties of five combinationmethods (equal-weight, best-expert, performance, frequentist, and copula) using simulatedexpert-judgment data for which we know the relationships among the experts’judgments and the true values. We examine cases in which experts are of equal orunequal quality and their judgments are independent, positively, or negatively dependent.Overall, the copula, frequentist, and best-expert approaches perform better andthe equal-weight combination worse than alternatives.M3-H.4 Hart CA; chris.hart@ntsb.govNational Transportation Safety BoardAVIATION RISK MANAGEMENT: THE IMPORTANCE OF GOVERN-MENT/INDUSTRY COLLABORATIONIn the mid-1990s commercial aviation, already an extremely high reliability system,faced the possibility of unacceptably high accident and fatality rates due to projectedgrowth in the demand for commercial air transport. The old risk managementparadigm, of regulators identifying a problem based on historical results and thenimposing a solution on the regulated industry, was recognized as being inadequate tomeet projected risk management needs. The Federal Aviation Administration had todevelop a new approach to managing risk in an increasingly complex and dynamicsystem-of-systems environment. The new approach features collaboration, proactiveidentification of potential problems involving those with the best information - pilots,mechanics, other airline employees - and ways of adopting necessary fixes that bypassedthe delays associated with the old regulation-heavy approach. In the decadefollowing the adoption of the new approach (1997-2007), commercial aviation saw a65% decrease in the fatal aviation accident rate, fueled largely by “system think” andpro-active safety information programs. This approach has potential applicabilityto other endeavors involving large system-of-systems problems, such as offshore oildrilling and aspects of homeland security.P.81 Hart PS, Yapa S; hart@american.eduAmerican UniversityAVOIDING BOOMERANG EFFECTS WITH MORAL APPEALSIn recent years, a number studies have examined how moral appeals may beused to increase donations to those in need. Several of these studies, however, havefound that the use of a moral appeal can boomerang and lead to a reduction in donations.In a series of previous studies, participants were shown a moral argumentdeveloped by philosopher Peter Singer in which they were told that just as they wouldrisk ruining their clothes to help save a drowning child directly in front of them, theyare equally obligated to help children who are in need abroad. Participants exposedto this argument contributed significantly less in response to a subsequent donationappeal than participants who were not given a moral argument. We build from thisprevious research in the present study by offering the following change - instead of