[SystemSafety] Risk Based Planning and Assessment - tank farms

[Dewi Daniels]

I also enjoyed "Fooled by Randomness" and found it a very thought-provoking
book.  Another book in the same vein is "The (Mis)Behaviour of Markets" by
Hudson and Mandelbrot (yes, that Mandelbrot).

I think these books cast serious doubts on much of the probability modelling
that is done.  The problem is that if the normal distribution is misapplied
to a situation that would be better modelled by a power-law distribution, it
will still give very accurate predictions in most cases (those near the
mean), but will significantly underestimate the probability of a rare event
(power-law distributions have fatter tails).  

Yours,

Dewi Daniels | Managing Director | Verocel Limited
Direct Dial +44 1225 718912 | Mobile +44 7968 837742 | Email
ddaniels at verocel.com

Verocel Limited is a company registered in England and Wales. Company
number: 7407595. Registered office: Grangeside Business Support Centre, 129
Devizes Road, Hilperton, Trowbridge, United Kingdom BA14 7SZ

> -----Original Message-----
> From: systemsafety-bounces at techfak.uni-bielefeld.de
> [mailto:systemsafety-bounces at techfak.uni-bielefeld.de] On Behalf Of Peter
> Bernard Ladkin
> Sent: 18 December 2012 18:12
> To: systemsafety at techfak.uni-bielefeld.de
> Subject: Re: [SystemSafety] Risk Based Planning and Assessment - tank
farms
> 
> 
> On 12/18/12 11:12 AM, Carl Sandom wrote:
> > Andy,
> >
> > You're definitely not alone in your thinking.
> 
> I agree. No, Andy, you are most definitely not alone! Count me in too!
> 
> As Carl points out, there are issues with rare events.
> 
> Taleb's books are appropriate references, although I remember finding
Black
> Swan quite repetetive. I prefer his earlier work, Fooled by Randomness, as
> far as I remember.
> 
> Another take on rare but possible events is Lee Clarke's Worst Cases
> (Chicago U.P., 2006). He suggests ways of dealing with rare possibilities
with
> very high consequences, which seemed to be one of your main concerns.
> 
> PBL
> 
> --
> Prof. Peter Bernard Ladkin, Faculty of Technology, University of
Bielefeld,
> 33594 Bielefeld, Germany
> Tel+msg +49 (0)521 880 7319  www.rvs.uni-bielefeld.de
> 
> 
> 
> 
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