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Regrets analysis is a technique devised specifically for situationswhere it is not possible to get risk assessment to yield a definitive answer because ofinherent difficulties in quantifying the factors contributing to the risks involved. As thename implies, regrets analysis addresses the decision-maker's natural fear of doingsomething wrong that will cause more harm than good in this type of ill-informedsituation.The procedure begins with recognition that we at least know the costs of thealternative actions we can take to minimize risks. Beyond that, we even knowimportant things about the comparative effectiveness of the alternative actions wecan take to reduce risks. With that much information it is possible to look across allthe possibilities and evaluate how the decision choices compare in terms of the costof being wrong. The paper provides a fictional example that shows how this analysis could be used toselect the best course of action for a situation many parents find themselves in, thepurchase of an auto for newly licensed, inexperienced teenage driver. Includes figure.

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Edition: Vol. - No. Published: 11/01/2005 Number of Pages: 7File Size: 1 file , 210 KB