Applications
- Investing in financial markets such as the stock market.
- Uncertainty or error is used in science and engineering notation. Numerical values should only be expressed to those digits that are physically meaningful, which are referred to as significant figures. Uncertainty is involved in every measurement, such as measuring a distance, a temperature, etc., the degree depending upon the instrument or technique used to make the measurement. Similarly, uncertainty is propagated through calculations so that the calculated value has some degree of uncertainty depending upon the uncertainties of the measured values and the equation used in the calculation.
- Uncertainty is designed into games, most notably in gambling, where chance is central to play.
- In scientific modelling, in which the prediction of future events should be understood to have a range of expected values.
- In physics, the Heisenberg uncertainty principle forms the basis of modern quantum mechanics.
- In weather forecasting it is now commonplace to include data on the degree of uncertainty in a weather forecast.
- Uncertainty is often an important factor in economics. According to economist Frank Knight, it is different from risk, where there is a specific probability assigned to each outcome (as when flipping a fair coin). Uncertainty involves a situation that has unknown probabilities, while the estimated probabilities of possible outcomes need not add to unity.
- In entrepreneurship: New products, services, firms and even markets are often created in the absence of probability estimates. According to entrepreneurship research, expert entrepreneurs predominantly use experience based heuristics called effectuation (as opposed to causality) to overcome uncertainty.
- In risk assessment and risk management.
- In metrology, measurement uncertainty is a central concept quantifying the dispersion one may reasonably attribute to a measurement result. Such an uncertainty can also be referred to as a measurement error. In daily life, measurement uncertainty is often implicit ("He is 6 feet tall" give or take a few inches), while for any serious use an explicit statement of the measurement uncertainty is necessary. The expected measurement uncertainty of many measuring instruments (scales, oscilloscopes, force gages, rulers, thermometers, etc.) is often stated in the manufacturer's specification. The most commonly used procedure for calculating measurement uncertainty is described in the Guide to the Expression of Uncertainty in Measurement (often referred to as "the GUM") published by ISO. A derived work is for example the National Institute for Standards and Technology (NIST) publication NIST Technical Note 1297 "Guidelines for Evaluating and Expressing the Uncertainty of NIST Measurement Results" and the Eurachem/Citac publication "Quantifying Uncertainty in Analytical Measurement" (available at the Eurachem homepage). The uncertainty of the result of a measurement generally consists of several components. The components are regarded as random variables, and may be grouped into two categories according to the method used to estimate their numerical values:
- Type A, those evaluated by statistical methods
- Type B, those evaluated by other means, e.g., by assigning a probability distribution
- Uncertainty has been a common theme in art, both as a thematic device (see, for example, the indecision of Hamlet), and as a quandary for the artist (such as Martin Creed's difficulty with deciding what artworks to make).
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