vault backup: 2025-07-08 07:25:20

expected-value-of-perfect-information.md

@@ -4,9 +4,15 @@ In [[decision-theory]], the expected value of perfect information (EVPI)
 is the price that one would be willing to pay
 in order to gain access to [[perfect-information]]
 
+The perceived *value* of decreased uncertainty
+must be weighed against its *cost*.
+
 This concept provides the basis for the solution of one or more [[open-problems]].
 To reduce [[risk]] in [[construction-estimating]],
 an organization pays in estimator hours.
 These hours have a direct cost in salary and benefits,
 however the greater cost is the opportunity cost
 of tying up an estimator who could otherwise be starting a new project.
+
+In many cases, the utility of doubled throughput
+far outweighs the increased risk of individual bids.

new-additions/evpi-takeoff.md

@@ -2,13 +2,6 @@
 
 Expected value of perfect information (EVPI)
 
-The perceived *value* of decreased uncertainty
-must be weighed against its *cost*.
-
-Takeoff purchases certainty with estimator hours.
-Estimator hours have a not insubstantial real cost in salary and burden,
-however the opportunity cost may exceed this.
-
 Count-based takeoff speed increases with count.
 
 ***
@@ -27,4 +20,4 @@ their success being a matter of perspective.
 ## Naming Conventions (Use Case vs. Description)
 
 Naming by use case is intuitive for those without estimating or field experience,
-but has the side effect that those acustomed to the names will inevitably treat them as descriptive.
+but has the side effect that those accustomed to the names will inevitably treat them as descriptive.

new-additions/the-failure-of-risk-management.md

@@ -6,8 +6,10 @@ by Douglas W. Hubbard
 
 ## Key Takeaways
 
-Qualititative risk analysis
-(i.e. risk matricies, scoring charts)
+### Qualitative Metrics Must Be Avoided
+
+Qualitative risk analysis
+(i.e. risk matrices, scoring charts)
 departs from legitimate statistical methodology
 and has no robust evidence to suggest its efficacy.
 There is good reason to believe that such methods
@@ -15,11 +17,26 @@ are deleterious to their intended purpose
 in contradiction to the common response
 that they are "better than nothing".
 
+### Utility as a Measure of Value
+
 Expected Value (Probability × Magnitude)
 alone can not predict or inform risky decisions,
 except for risk-neutral parties.
 People and organizations are risk-averse
-~~TODO: see chapter 6~~ 
+...
+
+* [ ] Finish this paragraph.  (see chapter 6) ➕ 2025-07-04
+
+### Expert Opinion Must Be ~~Adjusted~~
+
+Expert opinion is valuable despite its flaws.
+...
+
+The book details the statistically observable tendency for people
+to underestimate risk and to be overconfident in their beliefs.
+It describes the process of "calibration"
+by which people can be trained to compensate for this bias
+and make predictions far more accurately.
 
 ## Mentioned Topics and Abbreviations
 

purpose-of-estimating.md

@@ -16,7 +16,8 @@ For some owners, money is no object,
 and standardization is far more important
 than any potential construction savings.
 
-These owners can be expected to decline every [[value-engineering]] option offered.
+These owners can be expected to decline every [[value-engineering]] option offered
+(see [[gold-plating]]).
 
 ## For the Contractor
 

strategy.md

@@ -2,7 +2,9 @@
 
 The field of strategy is concerned with the optimal solutions of problematic scenarios.
 
-## Decision Theory
+## Disciplines
+
+### Decision Theory
 
 Decision theory concerns
 
@@ -10,14 +12,28 @@ Decision theory concerns
 ~~no competition~~
 ~~internal optimization~~
 
-## Game Theory
+### Game Theory
 
 Game theory concerns decisions made in competition with other intelligent actors.
 
 Predictions of competitor behavior in bids and market movements
 are made with a game-theoretic lens.
 
-### Auction Theory
+#### Auction Theory
 
 Auction theory is a subset of game theory
-that specifically addresses the 
+that specifically addresses the competitive bid format
+typical of construction project award.
+
+## In Construction Contracting
+
+**Executives** inform **Risk Tolerance** 
+**Risk Tolerance** informs **Minimum Estimate Certainty**
+
+### Bid Strategy
+
+Project cost certainty
+
+#### Expected Competition
+
+### Estimation Strategy

supertopics.md

@@ -1,3 +1,4 @@
 # Supertopics
 
-Supertopics are a concept I use to visualize and categorize my knowledge and interests.
+Supertopics are a concept that I use
+to visualize and categorize my knowledge and interests.