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| ==Biases in estimating== | | ==Biases in estimating== |
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− | [[File:Table rose time-value-of-money 1.jpg|thumbnail|'''Table 1.''' Biases affecting judgments under uncertainty.]]
| + | Unfortunately, a number of psychological biases exist, many of which are described by Tversky and Kahneman,<ref name=Tversky_etal_1981>Tversky, A., and D. Kahneman, 1981, The framing of decisions and the psychology of choice: Science, v. 211, p. 453-458.</ref> that tend to produce inconsistencies whenever we estimate under uncertainty (Table 1). |
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− | Unfortunately, a number of psychological biases exist, many of which are described by Tversky and Kahneman,<ref name=Tversky_etal_1981>Tversky, A., and D. Kahneman, 1981, The framing of decisions and the psychology of choice: Science, v. 211, p. 453-458.</ref> that tend to produce inconsistencies whenever we estimate under uncertainty ([[:Image:Table_rose_time-value-of-money_1.jpg|Table 1]]). For the development geologist, three such biases are especially dangerous:
| + | {| class = wikitable |
| + | |- |
| + | |+Table 1. Biases affecting judgments under uncertainty. |
| + | |- |
| + | ! Type of bias || Common example |
| + | |- |
| + | | Overconfidence || Estimators are much less accurate than they think they are. |
| + | |- |
| + | | Representativeness || Analog based on small sample size may not be truly analogous. |
| + | |- |
| + | | Availability || Recent or spectacular examples are more prone to be cited, regardless of their real frequency in nature. |
| + | |- |
| + | | Anchoring || In estimating, a low starting point leads to a lower final estimate, and a high starting point leads to a higher final estimate. |
| + | |- |
| + | | Unrecognized limits || Geologists forecasting future discoveries may disregard nongeological factors. |
| + | |- |
| + | | Motivation || Prospectors exaggerate the magnitude of reserves in order to sell the deal. |
| + | |- |
| + | | Conservatism || The feeling that overestimating a project is worse than underestimating it. |
| + | |} |
| + | |
| + | For the development geologist, three such biases are especially dangerous: |
| # ''Overconfidence,'' which leads to excessively narrow ranges. People naturally tend to set predictive ranges that typically correspond to a confidence significantly lower than the ranges they think they are setting.<ref name=Capen_1976>Capen, E. C., 1976, The difficulty of assessing uncertainty: Journal of Petroleum Technology, v. 28, p. 843-850.</ref> | | # ''Overconfidence,'' which leads to excessively narrow ranges. People naturally tend to set predictive ranges that typically correspond to a confidence significantly lower than the ranges they think they are setting.<ref name=Capen_1976>Capen, E. C., 1976, The difficulty of assessing uncertainty: Journal of Petroleum Technology, v. 28, p. 843-850.</ref> |
| # ''Conservatism,'' which leads to underestimates because professionals, fearing criticism, may feel it is worse to overestimate a project than to underestimate it.<ref name=Rose_1987>Rose, P. R., 1987, [http://archives.datapages.com/data/bulletns/1986-87/data/pg/0071/0001/0000/0001.htm Dealing with risk and uncertainty in exploration--how can we improve?]: AAPG Bulletin, v. 71, n. 1, p. 1-16.</ref> | | # ''Conservatism,'' which leads to underestimates because professionals, fearing criticism, may feel it is worse to overestimate a project than to underestimate it.<ref name=Rose_1987>Rose, P. R., 1987, [http://archives.datapages.com/data/bulletns/1986-87/data/pg/0071/0001/0000/0001.htm Dealing with risk and uncertainty in exploration--how can we improve?]: AAPG Bulletin, v. 71, n. 1, p. 1-16.</ref> |