The AAPG/Datapages Combined Publications Database
AAPG Bulletin
Figure
AAPG Bulletin; Year: 2016; Issue: April DOI: 10.1306/10191515063
Return to Full Text
Figure 5. Estimation of the chance of regret based on an estimate of prior (current) chance of success and estimates of what that could change to in light of bad news or good news. The x-axis represents the estimated chance of geological success (Pg); the y-axis shows the passage of time and the acquisition of new information. A decision and commitment to proceed has been made on the basis that the current Pg estimate exceeds the pot odds threshold. If the new information brings good news, the Pg estimate increases, and vice versa. We will regret the decision only if the revised Pg estimate falls below the pot odds threshold (gray shading). (A) The general case: P1 represents our current (prior) estimate of the chance of success, Pg, prior to gaining new information. P2 and P3 represent the possible future values of the Pg estimate, given that new information is bad news (P2) or good news (P3); x is the chance of bad news, and (1 − x) is the chance of good news. (B) Values used in the worked example described in the text.
Figure 5. Estimation of the chance of regret based on an estimate of prior (current) chance of success and estimates of what that could change to in light of bad news or good news. The x-axis represents the estimated chance of geological success (Pg); the y-axis shows the passage of time and the acquisition of new information. A decision and commitment to proceed has been made on the basis that the current Pg estimate exceeds the pot odds threshold. If the new information brings good news, the Pg estimate increases, and vice versa. We will regret the decision only if the revised Pg estimate falls below the pot odds threshold (gray shading). (A) The general case: P1 represents our current (prior) estimate of the chance of success, Pg, prior to gaining new information. P2 and P3 represent the possible future values of the Pg estimate, given that new information is bad news (P2) or good news (P3); x is the chance of bad news, and (1 − x) is the chance of good news. (B) Values used in the worked example described in the text.