Why is it necessary to reference what you already know when estimating in the FAIR model?

In the context of the FAIR model, referencing what you already know is crucial for narrowing the range of possible values in your estimations. This practice allows estimators to leverage existing knowledge, such as historical data, insights from similar risk events, and expert opinions, to form a more informed foundation for their assessments. By utilizing this background knowledge, the estimators can make better-informed assumptions about the potential impact and likelihood of risks, which ultimately enhances the accuracy of the estimates.

Narrowing the range of possible values is particularly important because it helps in focusing discussions, reducing uncertainty, and providing a clearer context for risk management decisions. When estimators use known data or past experiences, they can identify realistic boundaries that reflect the organization's risk environment more accurately. This approach is fundamental in the FAIR model as it seeks to quantify risks in a way that is both structured and pragmatic, facilitating more effective communication and decision-making.