"Decision theory is well adapted to coping with . . . probability distributions. Unfortunately, people are not" (Walters, 1986:333).
Why do our intuitions about probability lead us astray? Using forest management examples, in this extension note we discuss some interpretations of probability and the common difficulties that people have with this concept. We also describe recent advances in cognitive psychology which suggest simple ways to make probability more "user-friendly." The goal of this extension note is to give managers a better feel for the human elements of probability and uncertainty - what you're embracing, how to avoid common errors, and effective ways to talk about probability in ordinary language.
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Updated April 17, 2007