Misconceptions of Risk

by Terje Aven (University of Stavanger, Norway)

• ISBN13: 9780470686560
• ISBN10: 0470686561
• Format: eBook
• Copyright: 2009-12-01
• Publisher: Wiley

Summary

The risk discipline is young and there are a number of ideas, perspectives and conceptions of risk out there. A number of such common conceptions of risk are examined in the book, related to the risk concept, risk assessments, uncertainty analyses, risk perception, the precautionary principle, risk management and decision making under uncertainty. The Author discusses these concepts, their strengths and weaknesses, and concludes that they are often better judged as misconceptions of risk than conceptions of risk.

Table of Contents

Preface

Acknowledgements

Risk is equal to the expected value

Risk is a probability or probability distribution

Risk equals a probability distribution quantile (value-at-risk)

Risk equals uncertainty

Risk is equal to an event

Risk equals expected disutility

Risk is restricted to the case of objective probabilities

Risk is the same as risk perception

Risk relates to negative consequences only

Risk is determined by the historical data

Risk assessments produce an objective risk picture

There are large inherent uncertainties in risk analyses

Model uncertainty should be quantified

It is meaningful and useful to distinguish between stochastic and epistemic uncertainties

Bayesian analysis is based on the use of probability models and bayesian updating

Sensitivity analysis is a type of uncertainty analysis

The main objective of risk management is risk reduction

Decision-making under uncertainty should be based on science (analysis)

The precautionary principle and risk management cannot be meaningfully integrated

Conclusions

Index

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