Remediation Decision‐Making and Behavioral Economics: Results of an Industry Survey

Abstract

Abstract Decision methods applied in the remediation industry were evaluated using a survey of industry practitioners, in order to assess the relative roles of quantitative decision analysis and gut intuition. Principals from the disciplines of behavioral economics and decision theory were used as a framework to evaluate remediation decision behaviors revealed by the survey. The survey was completed by 118 respondents representing academia, consultants, clients, and others. Survey questions focused on perceptions and experiences related to inputs to decisions and decision processes, as well as remediation goal setting and outcomes. The most common remediation objective cited was short‐term interim measures and the least common was no further action (NFA) with clean closure. NFA was also sparingly achieved: 33% of respondents reported zero NFA closures in their career, and an overall 15% to 20% NFA closure rate was reported among more experienced respondents. Data inputs were ranked most important to decisions, while the decision process itself was ranked lowest. Intuition‐based decision methods such as asking for a trusted opinion, rules of thumb, and meetings were all used at last twice as often as decision analysis such as discounted cash flow or probabilistic analysis. Analysis of survey responses showed that cognitive biases, including overconfidence effect and intuition bias, are present to some extent in remediation decision‐making. Practitioners are advised to be mindful of the decision‐making processes they apply, and to incorporate elements of both intuition and decision analysis, as appropriate to the decisions being made.

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