| Core Concept |
| Derived from Italian 'risicare' - to dare.
A choice under uncertain conditions (rather than fate). |
| Attitudes |
| People assess risk differently.
Key question: what extent does the past effect the future? |
| Objective |
| Risk can be assessed quantitatively, using past data as a guide to future occurences |
| Sampling |
| The process of collecting data, wider sample = better accuracy |
|
| Data Mining |
| The use of data to justify decision making.
Pioneered by 19th century scientist Lambert Quetelet. |
|
|
| Subjective |
| Risk can be assessed qualitatively, using beliefs about the future.
This is epistemological - not fully analysable due to the limits of human knowledge. |
|
|
| Significance |
| An essential factor for market economies (compare with riskless Soviet economy).
Risk management is vital given the interconnectedness of the modern world. |
|
| Effect of Time |
| Time becomes most significant when decisions are irreversible
Can be value in waiting
Decisions tend to be biased by most recently arrived information |
|
| Utility |
| A means of evaluation based on perceived value
Origins in 17th century philosophy
Can be expressed as likelihood * consequences |
|
|
