Epistemic Uncertainties and System Choice in Decision Making

Authors

Michael H. Faber and Marc A. Maes

Abstract

The present paper reviews and outlines the interpretation of uncertainties. Thereafter, based on the Bayesiandecision theory a consistent decision framework is described, including and treating all uncertainties in thesame way. Furthermore, the controversial problem of selection of prior distributions is discussed from the perspective that any choice of priors corresponds to a specific choice of the system subject to decision analy-sis. A new decision theoretical formulation for the optimal selection of systems is then formulated as a formal prior decision problem. The presented models are illustrated by an example concerning optimal design andsystem choice and the significance of taking into account all uncertainties in the decision making is outlined.

Published in/by

Proceedings ICOSSAR'05, 9th International Conference on Structural Safety and Reliability, Rome, June 19-23, 2005.
In: ICOSSAR 2005, G. Augusti, G.I. Schuëller, M. Ciampoli (eds)© 2005 Millpress, Rotterdam, ISBN 90 5966 040 4, pp. 3519-3526