Precautionary Risk Management Dealing with Catastrophic Loss Potentials in Business, The Community and Society

by Jablonowski, Mark

• ISBN13: 9780230013520
• ISBN10: 023001352X
• Format: Hardcover
• Copyright: 2006-10-03
• Publisher: Palgrave Macmillan

Summary

This book shows why scientific assessments of catastrophic risk based on " averages" don't work, and sets the stage for making the tough choice between precaution and fatalism.

Author Biography

MARK JABLONOWSKI has spent nearly 30 years as a professional risk manager, insurance underwriter and insurance underwriting manager. He holds BA (Summa Cum Laude) and MA degrees in Economics from the University of Hartford, UK, where he has also served as an adjunct faculty member. During his wide professional and academic career, he has published over 50 papers in the fields of risk assessment, risk management, uncertainty modelling and the economics of risk. He is founder and principal of IntuitiveRisk (www.intuitiverisk.com), a consultancy and centre for research focusing on high-stakes risks.

Table of Contents

List of Tables and Figures	p. viii
Preface: A World of Hazards	p. x
Acknowledgements	p. xiii
Statistical Risk and its Treatment	p. 1
Economic optimization and cost/benefit analysis	p. 1
The nature of risk	p. 2
Using expected values	p. 5
Determining probabilities from data	p. 6
Extending the credibility of statistical results	p. 8
Uncertainty due to knowledge imperfections	p. 12
Generalized uncertainty and the "10 percent rule"	p. 15
The ABC's of High-Stakes Decisions	p. 17
The "iceberg" model of risk	p. 17
Why expected value decision-making doesn't work	p. 20
Decisions when probabilities are unknown, or irrelevant	p. 22
The dilemma of precaution	p. 25
Can precaution make things worse?	p. 26
Modifying expected values for imperfect knowledge	p. 28
Utility and risk aversion	p. 31
Where does insurance fit in?	p. 34
Fatalism, by default?	p. 35
Practical Precaution	p. 38
Is everything risky?	p. 38
Defining the "precautionary region"	p. 42
Integrating measurement uncertainty	p. 43
Taking "reasonable" precautions	p. 44
Protecting human life	p. 46
The importance of proper metrics	p. 47
Reasonable precautions and human evolution	p. 48
Facing the limits of practicality	p. 49
Precaution and Progress: Identifying Alternatives	p. 51
A wider view of planning	p. 51
Assessing alternatives	p. 55
An illustrative example	p. 56
Natural vs. man-made risk	p. 58
Shifting the burden of proof	p. 61
Alternatives assessment vs. post-fact risk management	p. 63
Post-fact risk management and the status quo	p. 69
The community commitment	p. 72
Public Policy and the Rise of Precautionary Regulation	p. 77
The status of precautionary regulation	p. 77
Strict liability and man-made perils	p. 81
Precautionary regulation and free enterprise	p. 84
Science and Precaution	p. 87
More science, not less	p. 87
Probability, decision and the science of risk assessment	p. 92
Exploratory modeling	p. 96
Science and objectivity	p. 99
Precaution and commerce	p. 101
The developing science of precaution	p. 102
Communicating about Risk	p. 105
The meaning(s) of the word "risk"	p. 105
The lay perception of risk	p. 107
Effective risk communication	p. 110
The feedback process	p. 114
The Future of Risk	p. 116
Is risk increasing?	p. 116
Cost/benefit revisited	p. 120
Reconciling fatalism and precaution	p. 125
Shaping the future	p. 129
Can we get there from here?	p. 133
A Working Model of Precaution	p. 136
An introduction to fuzzy sets	p. 136
Formalizing linguistic rules using fuzzy sets	p. 139
Fuzzy measurement	p. 140
Building a working model	p. 143
Artificial neural networks (ANNs) and human reasoning	p. 143
Using the model	p. 147
The Precautionary Risk Manager's Bookshelf	p. 149
A Concise Statement of the "Precautionary Principle"	p. 156
A Glossary of High-Stakes Risk Management	p. 157
Index	p. 163
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