A probability distribution must have two important characteristics. The possible outcomes must be both mutually exclusive and collectively exhaustive. Mutually Exclusive means that the quantity may have only one value at any one time. Collectively Exhaustive means that the probability distribution must describe every possible value the quantity might have. These characteristics are not onerous, but must be respected. A probability distribution may be represented graphically as either a probability density curve, or as a cumulative probability curve.
In Decision Analysis, we use a simplified approach to describing uncertain quantities. We ask a subject matter expert to describe their 80% Confidence Interval. They can do this by identifying what they believe to be the 10th, 50th, and 90th percentiles of probability. This is referred to as a 10-50-90 description of a probability distribution. The interview of a subject matter expert uses a well-established technique that is carefully designed to yield consistent results from many different experts assessing a wide variety of quantities. A Decision Analyst is trained and experienced in the use of this interviewing technique.




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Probability
Distribution




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