This year's Global Flow Measurement Workshop was held in Tonsberg, the home of the World Chess Champion, Magnus Carlsen. Phil presented a paper expanding on his 2009 paper - Cost Benefit Analyses in the Design of Allocation Systems - which proposed a method to calculate the integrated risked exposure to lost revenue. This cost benefit analysis approach allows meters and allocation methods with different uncertainties to be compared. The original paper has been cited numerous times and appears in NORSOK and UK Measurement Guidelines.
In the new paper, Further Adventures in Integrated Risk Exposure for Cost Benefit Analysis – from Economics to Quarks, Phil expands on the underlying basis of the approach and covers a number of further discussion points.
- Is there any supporting evidence that it is the correct approach?
- What is the underlying basis of the aversion to risk of loss?
- Net present value (NPV) calculations; how do these fit in with the approach? Does a reduction in uncertainty change the discount rate?
- Timelines; how do the risks evolve with time?
- Do recent developments in economic analysis associated with ergodic theory inform the approach?
Both papers can be found in the links below along with the presentation material.