Terje Aven 
Misconceptions of Risk 

We all face risks in a variety of ways, as individuals, businesses
and societies. The discipline of risk assessment and risk
management is growing rapidly and there is an enormous drive for
the implementation of risk assessment methods and risk management
in organizations. There are great expectations that these tools
provide suitable frameworks for obtaining high levels of
performance and balance different concerns such as safety and
costs.

The analysis and management of risk are not straightforward.
There are many challenges. The risk discipline is young and there
area a number of ideas, perspectives and conceptions of risk out
there. For example many analysts and researchers consider it
appropriate to base their risk management policies on the use of
expected values, which basically means that potential losses are
multiplied with their associated consequences. However, the
rationale for such a policy is questionable.

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 strenghts and weaknesses, and
concludes that they are often better judged as misconceptions of
risk than conceptions of risk.

Key Features:

* Discusses common conceptions of risk with supporting
examples.

* Provides recommendations and guidance to risk analysis and risk
management.

* Relevant for all types of applications, including engineering
and business.

* Presents the Author’s overall conclusions on the issues
addressed throughout the book.

All those working with risk-related problems need to understand
the fundamental ideas and concepts of risk. Professionals in the
field of risk, as well as researchers and graduate sutdents will
benefit from this book. Policy makers and business people will also
find this book of interest.

Inhoudsopgave

Preface.

Acknowledgements.

1 Risk is Equal to the Expected Value.

2 Risk is a Probability or Probability Distribution.

3 Risk Equals a Probability Distribution Quantile
(Value-at-Risk).

4 Risk Equals Uncertainty.

5 Risk is Equal to an Event.

6 Risk Equals Expected Disutility.

7 Risk is Restricted to the Case of Objective Probabilities.

8 Risk is the Same as Risk Perception.

9 Risk Relates to Negative Consequences Only.

10 Risk is Determined by the Historical Data.

11 Risk Assessments Produce an Objective Risk Picture.

12 There are Large Inherent Uncertainties in Risk Analyses.

13 Model Uncertainty Should be Quantified.

14 It is Meaningful and Useful to Distinguish between Stochastic
and Epistemic Uncertainties.

15 Bayesian Analysis is Based on the Use of Probability Models
and Bayesian Updating.

16 Sensitivity Analysis is a Type of Uncertainty Analysis.

17 The Main Objective of Risk Management is Risk Reduction.

18 Decision-Making Under Uncertainty Should be Based on Science
(Analysis).

19 The Precautionary Principle and Risk Management Cannot be
Meaningfully Integrated.

20 Conclusions.

Index.

Over de auteur

Terje Aven, University of Stavanger, Norway.?Terje Aven is Professor of risk management and the Principal Researcher at the International Research Institute of Stavanger (IRIS). He’s worked both in industry (5 years) and academia (20 years). In that time he has participated in, and led, many safety and risk related projects, and has won several awards for both research and teaching. He has published numerous papers in international journals and has authored several books.