Overview

How does a decision maker choose to act? When there is no uncertainty the answer is straight forward. Select the act that yields the highest payoff. But when the events are uncertain the act that yields the greatest payoff for one event may yield the lower payoff than a competing act for some other event.

For over 30 years risk assessment in the Oil and Gas industry has been based on the execution of QRA as a formal and systematic approach to estimating the likelihood and consequences of hazardous events, and expressing the results quantitatively as risk to people, the environment or the business. It also has been applied to assess the robustness and validity of quantitative results, by identifying critical assumptions and risk driving elements. Are there better approaches to decision making?

The St. Petersburg paradox is a paradox related to probability and decision theory in economics. The St. Petersburg paradox is a situation where a naive decision criterion which takes only the expected value into account predicts a course of action that presumably no actual person would be willing to take. Several resolutions are possible.

The paradox takes its name from its resolution by Daniel Bernoulli, the same Bernoulli as the originator of the fluid equation.

Speaker

Charles Bradley - WorleyParsons

Charles has a PhD in Chemical Engineering, obtained for research with the UK HSE in risk Assessment and is a member of the IChemE. He has 30 years’ experience, predominantly in the Oil, Gas, Nuclear and Power Industries as well as in Insurance related risk assessment. He currently works as the Chief Safety and Risk Engineer for WP.

Non SONG members must register their attendance in advance by email to song@ichememember.org.