System risk modelling and decision-making – Reflections and common pitfalls

Abstract

Since its foundation, the Joint Committee on Structural Safety (JCSS) has been engaged in the discussion of methods for determining the reliability of components, calibration of standards, as well as risk modelling of systems. In publications, it is regularly explained which methods have which advantages. In the literature, the drawbacks and pitfalls that challenge rational decisions and help to develop and find more appropriate methods for practice are often not documented.

Such problems can lead to decisions, which are not rational from a decision-theoretic point of view, some of which are worse than a random decision. Especially events, with a very small probability of occurrence hardly give any feedback possibilities from reality and evidence-based analysis of decisions is not possible. Careful selection of methods and knowledge/information of the assumptions is crucial to rational decisions.

This paper will discuss some of the identified pitfalls based on the discussions in the JCSS. It will span from aspects in the uncertainty quantification, uncertainty propagation, consequence assessment as well as approaches that are found and used in practice for decision-making (e.g. probability interpretations, risk aversion, risk matrices and FN diagrams). This paper can be seen as a documentation of outtakes from the discussions which led to the joint understanding and approach of the JCSS. The paper does not claim to be complete concerning all the possible pitfalls in risk assessments and system identification. But it does provide important reflections and indicates where the eyes must be kept open. Further, the paper points to a way of rational decision-making accounting for the uncertainties in information.