Tsiga, Z;
Emes, M;
(2022)
Decision making in Engineering Projects.
Procedia Computer Science
, 196
, Article Procedia Computer Science. 10.1016/j.procs.2021.12.094.
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Abstract
Even though risk management is a vital aspect of project management, the way that risk-based decisions are taken in projects is not well documented. Economic theory employs the concept of utility and assumes that decision makers are rational. Behavioural economics and prospect theory challenge this idea, making a number of specific claims about how decision-making behaviour deviates from rationality in practice. Based on a focus group discussion with project managers, this research highlights the importance of risk management in underpinning decision making and investigates the extent of rationality and applicability of prospect theory in an engineering project context. Prospect theory’s claims of reference dependence and loss aversion are found to be important, but the claims of diminishing sensitivity and probability weighting appear to be less relevant.
| Type: | Article |
|---|---|
| Title: | Decision making in Engineering Projects |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1016/j.procs.2021.12.094 |
| Publisher version: | https://doi.org/10.1016/j.procs.2021.12.094 |
| Language: | English |
| Additional information: | © 2021 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0) Peer-review under responsibility of the scientific committee of the CENTERIS - International Conference on ENTERprise Information Systems / ProjMAN - International Conference on Project MANagement / HCist - International Conference on Health and Social Care Information Systems and Technologies 2021 |
| Keywords: | Decision making; Risk Management; Expected Utility Theory; Prospect Theory; Engineering Projects; |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Maths and Physical Sciences UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Maths and Physical Sciences > Dept of Space and Climate Physics |
| URI: | https://discovery-pp.ucl.ac.uk/id/eprint/10142164 |
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