The Influence of Framing on Oil and Gas Decision Making:
An Overlooked Human Bias in
Organizational Decision Making

Table of Contents

Abstract
Acknowledgements
Chapter 1 Introduction
1.1 Purpose
1.2 Literature Review
Chapter 2 General Background
2.1 Definitions
2.2 Definition of Decision Making
2.3 Reducing Uncertainty: 2.3.1 Statistics; 2.3.2 Data Mining, Machine Learning and Statistics; 2.3.3 Probability; 2.3.4 Expected Value; 2.3.5 Bayesian Rule; 2.3.6 Fuzzy Logic; 2.3.7 Operations Research; 2.3.8 Formal Decision-Making Process; 2.3.9 Real Options
2.4 Making the Decision (Choosing): 2.4.1 Normative Approach; 2.4.2 Expected Utility Principle; 2.4.4 Game Theory; 2.4.5 Descriptive Approach; 2.4.6 Heuristics and Biases; 2.4.7 Availability; 2.4.8 Anchor and Adjust; 2.4.9 Representativeness
2.5 Prospect Theory: 2.5.1 Empirical Research on Prospect Theory; 2.5.2 Asian Disease Experiment; 2.6 Decision Frames; 2.6.1 Medical Decision Making; 2.6.2 Framing Effects and Remediation by Formal Training; 2.6.3 Difference Between Clinical and Oil and Gas Decision Making; 2.6.4 Framing in Oil and Gas
2.7 Biases in Oil and Gas: 2.7.1 Sunk Cost; 2.7.2 Existence of a Prior Account; 2.7.3 Probability and Risk Perception; 2.7.4 Motivational Biases; 2.7.5 Social Influences; 2.7.6 Real Options Framing
2.8 Research Scope: 2.8.1 Hypotheses
Chapter 3 Methods
3.1 Experimental Design: 3.1.1 Questionnaire; 3.1.2 Participants
Chapter 4 Results
4.1 Overall Survey Response
4.2 Survey Results: 4.2.1 Decision 1; 4.2.2 Decision 2; 4.2.3 Decision 3; 4.2.4 Decision 4; 4.2.5 Summary of Framing Results
Chapter 5 Discussion
5.1 Discussion of Hypotheses: 5.1.1 Hypothesis 1; 5.1.2 Hypothesis 2; 5.1.3 Hypothesis 3; 5.1.4 Hypothesis 4
5.2 Difference Between Actual and Survey Conditions
5.3 Are Experts Immune?
5.4 Practical And Economic Aspects: 5.4.1 Oil Shale Project; 5.4.2 Horizontal Well Project; 5.4.3 Decision to Invest $2.8 billion for an Offshore Platform; 5.4.4 Reserves; 5.4.5 Production Rate; 5.4.6 Price Forecasts; 5.4.7 Development Costs and Timing
5.5 Future Work
Chapter 6 Conclusions and Recommendations
6.1 Conclusions
6.2 Recommendations
References Cited
Selected Bibliography
Appendices
Appendix 1 Dominance Matrices
Appendix 2 Actual Surveys Sent Out
Appendix 3 Databases Searched and Search Criteria
Appendix 3 Explanation of Chi-square Test

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