91 comments on IEA WEO 2008 - Fuzzy Focus on Saudi Arabia
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91 comments on IEA WEO 2008 - Fuzzy Focus on Saudi Arabia
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Agreed. We have to convert to the Bayesian religion.
Not just with respect to what the rocks can ultimately yield but also with respect to how the decision makers behave.
As someone has suggested: What if King Abdullah is presented with a new great-grandchild that captures his heart and he begins to give serious attention to production targets for 2060 an beyond?
The EIA's high price case does get at that a bit. (It is a near-term peak oil scenario, painted mostly in numbers with precious little commentary).
Belief is not governed by the laws of probability, but by fast and frugal heuristics allowing fast evaluations (these can mimic Bayesian inferences) (Kahneman, Tversky and recently many in neuroscience)
We use analog not digital decisionmaking algorithms - multiple stimuli at one time do not get 'weighted' in our decisions - which ever shouts the loudest gets answered.
Humans are not Bayesian thinkers. That would be well above our paygrade.
In my opinion, many humans can be educated to be Bayesian thinkers. Indeed, that was one of the main goals of a course in informal logic (critical thinking) that I taught for more than twenty years.
One can view various scenarios sequentially and put subjective probabilities on each one. For example, I put the odds of inflation at sixty percent and the odds of deflation at forty percent; either scenario is plausible, but I think inflation is somewhat more likely than deflation.
I suspect that petroleum geologists, in making their recommendations to "Drill over there, not right here" are using Baysian thinking to come up with their recommendations.
Of course I agree that Bayesian thinking does not come "naturally," because we want and crave certainty. Nevertheless, I think the proper higher education can go a long way to create many Bayesian thinkers. For estimating future Saudi oil production I think Bayesian approaches are a sine qua non.
Don - I totally disagree that we are Bayesian thinkers. We can be taught to THINK in Bayesian terms, which is an advantage when nothing else is going on, and yes, for estimating future Saudi oil production, we SHOULD think in Bayesian terms. But once someone in the room or debate feels politically or otherwise threatened, etc. all Bayesian priors go out the window. I will discuss this in my belief systems post. Sorry to sidetrack discussion - lets focus on IEA KSA.
And to Datamunger, even though I disagree about Bayesian wiring, I do agree that if the Prince of Saud can access and act upon thoughts about his unborn grandchild (intergenerational equity), then that changes the game....
We don't disagree on the wiring. It is against the wiring (for most of us).
But, hey, education is all about domesticating and civilizing our sorry asses so that we can do things that don't come naturally. (And avoid things that do!!)