Estimating using risk analysis for construction

Risk analysis in construction is becoming important as competition, project size and complexity increase. Traditional risk analysis relies on rules of thumb. While this method works, it is not scientific. Research findings by cognitive psychologists revealed that subjective judgenments by human beings are sometimes fallacious and erroneous. Empirical studies with construction professionals, i.e. context-specific subjects making decisions on complex-specific tasks, showed that such judgement were not as fallacious as it suggested. The principles and techniques of risk management for project cost and time are now quite well known. Our professional duty of care reqyuires that we are familiar with the limitations of any technique we use in practice. Hence, this paper aims at (i) highlighting the weaknesses of current approaches to risk management; (ii) focusing on the role of the decision maker as a human being in a social and corporate context by carrying out experimental studies of patterns of risk perceptions; and (iii) model these perceptions by a fuzzy system; and (iv) suggesting some simple , practical approaches which will help to reduce the negative effects of human biases in the risk management of construction projects.