Willingness-to-pay for a probabilistic flood forecast: a risk-based decision-making game

Abstract. In order to communicate forecast uncertainty, there has been a gradual adoption of probabilistic hydro-meteorological forecasts. This uncertainty is twofold, as it constitutes both an added value and a challenge for the forecaster and the user of the forecasts. Many authors have demonstrated the added (economic) value of probabilistic forecasts over deterministic forecasts, for diverse activities of the water sector (e.g. flood protection, hydroelectric power management and navigation). However, the richness of the information is also a source of challenges for operational uses, due partially to the difficulty to transform the probability of occurrence of an event into a binary decision. This paper presents the results of a risk-based decision-making experiment, set up as a game on the topic of flood protection mitigation, called "How much are you prepared to pay for a forecast?". The game was played at several workshops in 2015, which were attended by operational forecasters and academics working in the field of hydro-meteorology. The aim of this experiment is to contribute to understanding the role of probabilistic forecasts in decision-making processes and their perceived value by decision-makers. Based on the participants' willingness-to-pay for a forecast, the results of the game show that the value (or the usefulness) of a forecast depends on several factors, including the way users perceive the quality of their forecasts and link it to the perception of their own performances as decision-makers. Balancing avoided costs and the cost (or the benefit) of having forecasts available for making decisions is not straightforward, even in a simplified game situation, and is a topic that deserves more attention from the hydrological forecasting community.

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Willingness-to-pay for a probabilistic flood forecast: a risk-based decision-making game

Hydrology and Earth System Sciences ◽

10.5194/hess-20-3109-2016 ◽

2016 ◽

Vol 20 (8) ◽

pp. 3109-3128 ◽

Cited By ~ 20

Author(s):

Louise Arnal ◽

Maria-Helena Ramos ◽

Erin Coughlan de Perez ◽

Hannah Louise Cloke ◽

Elisabeth Stephens ◽

...

Keyword(s):

Decision Making ◽

Willingness To Pay ◽

Economic Value ◽

Decision Makers ◽

Flood Protection ◽

Added Value ◽

Hydroelectric Power ◽

Probabilistic Forecasts ◽

Decision Making Processes

Abstract. Probabilistic hydro-meteorological forecasts have over the last decades been used more frequently to communicate forecast uncertainty. This uncertainty is twofold, as it constitutes both an added value and a challenge for the forecaster and the user of the forecasts. Many authors have demonstrated the added (economic) value of probabilistic over deterministic forecasts across the water sector (e.g. flood protection, hydroelectric power management and navigation). However, the richness of the information is also a source of challenges for operational uses, due partially to the difficulty in transforming the probability of occurrence of an event into a binary decision. This paper presents the results of a risk-based decision-making game on the topic of flood protection mitigation, called "How much are you prepared to pay for a forecast?". The game was played at several workshops in 2015, which were attended by operational forecasters and academics working in the field of hydro-meteorology. The aim of this game was to better understand the role of probabilistic forecasts in decision-making processes and their perceived value by decision-makers. Based on the participants' willingness-to-pay for a forecast, the results of the game show that the value (or the usefulness) of a forecast depends on several factors, including the way users perceive the quality of their forecasts and link it to the perception of their own performances as decision-makers.

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strategi dalam pengambilan keputusan

10.31227/osf.io/6j9qf ◽

2019 ◽

Author(s):

Suci Handayani Handayani ◽

Hade Afriansyah

Keyword(s):

Decision Making ◽

Imperfect Information ◽

Economic Value ◽

Decision Makers ◽

Decision Making Process ◽

Administrative Process ◽

Left Behind ◽

Information Time ◽

Complex Matter ◽

General Individuals

Decision making is one element of economic value, especially in the era of globalization, and if it is not acceptable in the decision making process, we will be left behind. According to Robins, (2003: 173), Salusu, (2000: 47), and Razik and Swanson, (1995: 476) say that decision making can be interpreted as a process of choosing a number of alternatives, how to act in accordance with concepts, or rules in solving problems to achieve individual or group goals that have been formulated using a number of specific techniques, approaches and methods and achieve optimal levels of acceptance.Decision making in organizations whether a decision is made for a person or group, the nature of the decision is often determined by rules, policies, prescribed, instructions that have been derived or practices that apply. To understand decision making within the organization it is useful to view decision making as part of the overall administrative process. In general, individuals tend to use simple strategies, even if in any complex matter, to get the desired solution, because the solution is limited by imperfect information, time and costs, limited thinking and psychological stress experienced by decision makers.

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D Minus Months: Strategic Planning for Weather-Sensitive Decisions

Decision Analysis ◽

10.1287/deca.2021.0434 ◽

2021 ◽

Author(s):

Eva D. Regnier ◽

Joel W. Feldmeier

Keyword(s):

Decision Making ◽

Decision Analysis ◽

Weather Forecasting ◽

Decision Makers ◽

Strategic Decisions ◽

Sequential Decisions ◽

Weather Forecasts ◽

Current State ◽

Set Up ◽

Made In

General Eisenhower’s decisions to postpone and, one day later, to launch the “D-Day” invasion of Normandy are a gripping illustration of sequential decisions under uncertainty, suitable for any introductory decision analysis class. They’re also the archetypal example of weather-sensitive decision making using a forecast. This paper develops a framework for analyzing weather-sensitive decisions with a focus on the less-familiar strategic decisions that determine how forecasts are produced and what operational alternatives are available so that decision makers can extract value from forecasts. We tell the story of the decisions made in the months before D-Day regarding how to set up the forecasting process and the myriad decisions implicating nation-level resources that prepared Allied forces not just to invade, but to hold open that decision until the last possible hour so that Eisenhower and his staff could use the critical forecasts. Finally, we overview the current state of the weather-forecasting enterprise, the current challenges of interest to decision analysts, and what this means for decision analysts seeking opportunities to help the weather enterprise improve forecasts and to help operational decision makers extract more value from modern weather forecasts.

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Toward Decision-Making Support: Valuation and Mapping of New Management Scenarios for Tunisian Cork Oak Forests

Forests ◽

10.3390/f11020197 ◽

2020 ◽

Vol 11 (2) ◽

pp. 197

Author(s):

Mariem Khalfaoui ◽

Hamed Daly-Hassen ◽

Boutheina Stiti ◽

Sihem Jebari

Keyword(s):

Decision Making ◽

Spatial Distribution ◽

Ecosystem Services ◽

Economic Value ◽

Cork Oak ◽

Decision Makers ◽

Management Scenarios ◽

Density Decrease ◽

Mediterranean Countries ◽

The Impact

Forest ecosystems are an important anthropogenic pillar to human wellbeing, providing a multitude of ecosystem services. In Mediterranean countries, where climate change effects are exponentially increasing, the value of the forest ecosystem services is even higher and their preservation is more crucial. However, the biophysical and economic value of such services is usually not observable due to their non-marketable characteristics, leading to their underestimation by decision-makers. This paper aims to guide decision-making through a set of new management scenarios based on ecosystem services’ values and their spatial distribution. It is a cumulative multidisciplinary study based on biophysical models results, economically valued and implemented using the geographic information system (GIS) to analyze spatial data. The investigation was based on a biophysical and economic valuation of cork, grazing, carbon sequestration and sediment retention as a selection of ecosystem services provided by cork oak forest (Ain Snoussi, Tunisia). The valuation was made for the actual situation and two management scenarios (density decrease and afforestation of the shrub land), with emphasis on their spatial distribution as a basis to new management. The total economic value (TEV) of the investigated services provided by Ain Snoussi forest (3787 ha) was €0.55 million/year corresponding to €194/ha/year. The assessment of two different scenarios based on the land cover changes showed that the afforestation scenario provided the highest TEV with €0.68 million/year and an average of €217/ha, while the density decrease scenario provided €0.54 million/year and an average of €191/ha. Such results may orient decision-makers about the impact new management may have, however they should be applied with caution and wariness due to the importance of the spatial dimension in this study.

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Resilience–Vulnerability Analysis: A Decision-Making Framework for Systems Assessment

Sustainability ◽

10.3390/su12229306 ◽

2020 ◽

Vol 12 (22) ◽

pp. 9306

Author(s):

Nikolaos A. Skondras ◽

Demetrios E. Tsesmelis ◽

Constantina G. Vasilakou ◽

Christos A. Karavitis

Keyword(s):

Decision Making ◽

Complex Systems ◽

Forest Fire ◽

Decision Makers ◽

Added Value ◽

Initial Assessment ◽

Analysis Framework ◽

Current Effort ◽

Policy Makers ◽

Combined Use

The terms ‘resilience’ and ‘vulnerability’ have been widely used, with multiple interpretations in a plethora of disciplines. Such a variety may easily become confusing, and could create misconceptions among the different users. Policy makers who are bound to make decisions in key spatial and temporal points may especially suffer from these misconceptions. The need for decisions may become even more pressing in times of crisis, where the weaknesses of a system are exposed, and immediate actions to enhance the systemic strengths should be made. The analysis framework proposed in the current effort, and demonstrated in hypothetical forest fire cases, tries to focus on the combined use of simplified versions of the resilience and vulnerability concepts. Their relations and outcomes are also explored, in an effort to provide decision makers with an initial assessment of the information required to deal with complex systems. It is believed that the framework may offer some service towards the development of a more integrated and applicable tool, in order to further expand the concepts of resilience and vulnerability. Additionally, the results of the framework can be used as inputs in other decision making techniques and approaches. This increases the added value of the framework as a tool.

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PRE-COVERAGE ASSESSMENTS OF NEW HOSPITAL INTERVENTIONS ON AUSTRIA: METHODOLOGY AND 3 YEARS OF EXPERIENCE

International Journal of Technology Assessment in Health Care ◽

10.1017/s0266462312000025 ◽

2012 ◽

Vol 28 (2) ◽

pp. 171-179 ◽

Cited By ~ 6

Author(s):

Philipp Mad ◽

Sabine Geiger-Gritsch ◽

Gerda Hinterreiter ◽

Stefan Mathis-Edenhofer ◽

Claudia Wild

Keyword(s):

Decision Making ◽

New Technologies ◽

Decision Makers ◽

Medical Services ◽

Decision Making Process ◽

Relevant Evidence ◽

Objective Evidence ◽

The Status ◽

Set Up ◽

Grade Methodology

Objectives: A new decision-making process was set up by the Austrian Ministry of Health to regulate coverage of new proposed Extra Medical Services (EMS; German: Medizinische Einzel-Leistung [MEL]) in 2008. As part of the annual decision-making process an independent academic institution (LBI-HTA) is evaluating relevant evidence on these new technologies and provides HTAs, including evidence-based recommendations for decision makers.Methods: About ten EMS assessments are performed annually by the LBI-HTA simultaneously between January and March. Each peer-reviewed report consists of a systematic literature review and critical appraisal of evidence using the GRADE methodology. The generation of numerous reports of good quality standards within the short timeframe is achieved by a standardized workflow with predefined assignment of tasks for all participants.Results: In total, the LBI-HTA performed twenty-five EMS assessments on thirty-three different interventions in the last three years. Coverage was recommended with limitation for eleven (33%) interventions, and not recommended for twenty-two (66%) interventions. The federal health commission decided on acceptance or preliminary acceptance of coverage in seven (22%) cases, rejection in eighteen (55%) cases and changed the status to “subject to approval” in seven (24%) cases.Conclusions: Pre-coverage assessment of new hospital interventions was implemented successfully in Austria. It has proved to be a useful tool to support decision makers with objective evidence when deciding whether or not to reimburse medical services.

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Analysis of the Relative Operating Characteristic and Economic Value Using the LAPS Ensemble Prediction System in Taiwan

Monthly Weather Review ◽

10.1175/mwr-d-14-00189.1 ◽

2015 ◽

Vol 143 (5) ◽

pp. 1833-1848 ◽

Cited By ~ 4

Author(s):

Hui-Ling Chang ◽

Shu-Chih Yang ◽

Huiling Yuan ◽

Pay-Liam Lin ◽

Yu-Chieng Liou

Keyword(s):

Decision Making ◽

Operating Characteristic ◽

Economic Value ◽

Ensemble Prediction ◽

Prediction System ◽

Forecast System ◽

Relative Operating Characteristic ◽

Ensemble Prediction System ◽

Discrimination Ability ◽

Probabilistic Forecasts

Abstract Measurement of the usefulness of numerical weather prediction considers not only the forecast quality but also the possible economic value (EV) in the daily decision-making process of users. Discrimination ability of an ensemble prediction system (EPS) can be assessed by the relative operating characteristic (ROC), which is closely related to the EV provided by the same forecast system. Focusing on short-range probabilistic quantitative precipitation forecasts (PQPFs) for typhoons, this study demonstrates the consistent and strongly related characteristics of ROC and EV based on the Local Analysis and Prediction System (LAPS) EPS operated at the Central Weather Bureau in Taiwan. Sensitivity experiments including the effect of terrain, calibration, and forecast uncertainties on ROC and EV show that the potential EV provided by a forecast system is mainly determined by the discrimination ability of the same system. The ROC and maximum EV (EVmax) of an EPS are insensitive to calibration, but the optimal probability threshold to achieve the EVmax becomes more reliable after calibration. In addition, the LAPS ensemble probabilistic forecasts outperform deterministic forecasts in respect to both ROC and EV, and such an advantage grows with increasing precipitation intensity. Also, even without explicitly knowing the cost–loss ratio, one can still optimize decision-making and obtain the EVmax by using ensemble probabilistic forecasts.

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How They Decide

Journal of Research in Music Education ◽

10.1177/0022429412474313 ◽

2013 ◽

Vol 61 (1) ◽

pp. 5-25 ◽

Cited By ~ 12

Author(s):

Marci L. Major

Keyword(s):

Decision Making ◽

School District ◽

Music Education ◽

Economic Value ◽

Decision Makers ◽

Public School District ◽

Music Program ◽

Education Decision ◽

The Aesthetic

This study was designed to examine the decision-making process for keeping or cutting the music program in one selected public school district. Lekbery School District, in the Detroit suburb of Lekbery, Michigan, had not made extreme cuts to the music program in over 10 years, nor had it specifically targeted the music program when budgets cuts did occur. Qualitative data collected through interviews and documents indicated that Lekbery Schools District’s administrators had committed to offering a well-rounded education to all of their students and that music education played a large part in that education. For decision making regarding funding and support for music education, decision makers considered (a) their personal values and philosophies of music education, (b) the values and demands of the community, (c) the quality of teaching that Lekbery could afford and provide, (d) the aesthetic and utilitarian purposes of keeping music education in the curriculum, (e) the economic value that music added, and (f) how the program contributed to the overall image of the school district.

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“Are we talking just a bit of water out of bank? Or is it Armageddon?” Front line perspectives on transitioning to probabilistic fluvial flood forecasts in England

Geoscience Communication ◽

10.5194/gc-3-203-2020 ◽

2020 ◽

Vol 3 (2) ◽

pp. 203-232

Author(s):

Louise Arnal ◽

Liz Anspoks ◽

Susan Manson ◽

Jessica Neumann ◽

Tim Norton ◽

...

Keyword(s):

Decision Making ◽

Early Warning ◽

Scientific Practice ◽

Decision Makers ◽

Decision Making Process ◽

Probabilistic Forecasting ◽

Flood Warning ◽

Probabilistic Forecasts ◽

The Uk ◽

Ideal Framework

Abstract. By showing the uncertainty surrounding a prediction, probabilistic forecasts can give an earlier indication of potential upcoming floods, increasing the amount of time available to prepare. However, making a decision based on probabilistic information is challenging. As part of the UK-wide policy's move towards forecast-based flood risk management, the Environment Agency (EA), responsible for managing risks of flooding in England, is transitioning towards the use of probabilistic fluvial forecasts for flood early warning. While science and decision-making are both individually progressing, there is still a lack of an ideal framework for the incorporation of new and probabilistic science into decision-making practices, and, respectively, the uptake of decision-makers' perspectives in the design of scientific practice. To address this, interviews were carried out with EA decision-makers (i.e. Duty Officers), key players in the EA's flood warning decision-making process, to understand how they perceive this transition might impact on their decision-making. The interviews highlight the complex landscape in which EA Duty Officers operate and the breadth of factors that inform their decisions, in addition to the forecast. Although EA Duty Officers already account for uncertainty and communicate their confidence in the forecast they currently use, the interviews revealed a decision-making process which is still very binary and linear to an extent, which appears at odds with probabilistic forecasting. Based on the interview results, we make recommendations to support a successful transition to probabilistic forecasting for flood early warning in England. These recommendations include the new system's co-design together with Duty Officers, the preparation of clear guidelines on how probabilistic forecast should be used for decision-making in practice, EA communication with all players in the decision-making chain (internal and external) that this transition will become operational practice and the documentation of this transition to help other institutes yet to face a similar challenge. We believe that this paper is of wide interest for a range of sectors at the intersection between geoscience and society. A glossary of technical terms is highlighted by asterisks in the text and included in Appendix A.

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Benchmarking of product recovery alternatives in reverse logistics

Benchmarking An International Journal ◽

10.1108/bij-01-2014-0002 ◽

2016 ◽

Vol 23 (2) ◽

pp. 406-424 ◽

Cited By ~ 11

Author(s):

S. K. Sharma ◽

S.S. Mahapatra ◽

M.B. Parappagoudar

Keyword(s):

Decision Making ◽

Reverse Logistics ◽

Product Recovery ◽

Decision Makers ◽

Analytic Hierarchy ◽

Content Type ◽

Multiple Decision Makers ◽

Novel Approach ◽

Objective And Subjective Weights ◽

Set Up

Purpose – Selection of best product recovery alternative in reverse logistics (RL) has gained great attention in supply chain community. The purpose of this paper is to provide a robust group decision-making tool to select the best product recovery alternative. Design/methodology/approach – In this paper, fuzzy values, assigned to various criteria and alternatives by a number of decision makers, are converted into crisp values and then aggregated scores are evaluated. After obtaining experts’ scores, objective and subjective weights of the criteria have been calculated using variance method and analytic hierarchy process, respectively. Then integrated weights of criteria are evaluated using different proportions of the two weights. The superiority and inferiority ranking (SIR) method is then employed to achieve the final ranking of alternatives. An example is presented to demonstrate the methodology. Findings – The proposed methodology provides decision makers a systematic, flexible and realistic approach to effectively rank the product recovery alternatives in RL. The alternatives can easily be benchmarked and best recovery strategy can be obtained. The sensitivity analysis carried out by changing different proportion of objective and subjective weights reveals that best ranking alternative never changes and proves the robustness of the methodology. The present benchmarking framework can also be used by decision makers to simplify any problem which encounters multi-attribute decision making and multiple decision makers. Research limitations/implications – The proposed methodology should be tested in different situations having varied operational and environmental conditions dealing with different products. A real case study from an industrial set up can help to assess the behavior of the proposed methodology. The presented methodology however can deal with such multi-disciplinary and multi-criteria issues in a simple and structured manner and ease the managers to select the best alternative. Originality/value – A novel approach for decision making taking into account both objective and subjective weights for criteria has been proposed to rank the best recovery alternatives in RL. The proposed methodology uses SIR method to prioritize the alternatives. As RL alternative selection is an important issue and involves both technical and managerial criteria as well as multiple decision makers, the proposed robust methodology can provide guidelines for the practicing managers.

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