ABSTRACT
This chapter addresses methodologies to be used when data are available or can be obtained. It explores the situation when data are not available and subjective estimates must be made. In most cases, data will be available, or can be obtained, to aid in the estimation of random inputs for a decision model. One of the heuristics they identified is the “availability heuristic.” This heuristic involves judging the probability of an event according to how easily these or similar events can be recalled. The representativeness heuristic involves assessing the probability of an event or a sample “by the degree by which it is similar in essential properties to its parent population, and reflects the salient features of the process by which it is generated”. The anchoring and adjusting heuristic is typically applied when people have an initial estimate of some quantity and then make an adjustment to the estimate for a new, but related, situation.
