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![Page 1: What is Risk? Different perspectives and implications for risk management Terje Aven University of Stavanger, Norway PSAM9 Hong Kong.](https://reader035.fdocuments.us/reader035/viewer/2022062518/56649e8f5503460f94b938a1/html5/thumbnails/1.jpg)
What is Risk? Different perspectives and implications
for risk management
Terje Aven
University of Stavanger,
Norway PSAM9
Hong Kong
![Page 4: What is Risk? Different perspectives and implications for risk management Terje Aven University of Stavanger, Norway PSAM9 Hong Kong.](https://reader035.fdocuments.us/reader035/viewer/2022062518/56649e8f5503460f94b938a1/html5/thumbnails/4.jpg)
Risk offshore platform
Where is the risk? Mental
construction?
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What is Risk?
![Page 6: What is Risk? Different perspectives and implications for risk management Terje Aven University of Stavanger, Norway PSAM9 Hong Kong.](https://reader035.fdocuments.us/reader035/viewer/2022062518/56649e8f5503460f94b938a1/html5/thumbnails/6.jpg)
Merriam-Webster online Dictionary:
• possibility of loss or injury
• someone or something that creates or
suggests a hazard
• the chance of loss
• the degree of probability of such loss
What is Risk?
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Scientific Risk Community:
What is Risk?
P,E
(A,X,P)
A,X
A: Event, X: consequences of A
(A,X,U)
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LNG plant
(A,X,P)P,E
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LNG plant
(A,X,P)P,E
Conclusion on risk acceptability, P ≤ 10-5
Risk reduction processes (ALARP) based on P and E
(A,X,U)
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Social scientist critique of risk assessments
• Risk assessment consultants and the formal
decision-making remain relatively unaffected
Risk-informed decision-making, not risk-based
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• Risk equals expected loss
• Risk is the probability of an adverse
outcome
What is Risk?
P,E
A: Event, X: consequences of A
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• Risk equals expected disutility
• Risk refers to situations with known probabilities for the randomness the decision maker is faced with
What is Risk?
P,E
A: Event, X: consequences of A
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Scientific Risk Community:
What is Risk?
P,E
(A,X,P)
A,X
A: Event, X: consequences of A
(A,X,U)
![Page 14: What is Risk? Different perspectives and implications for risk management Terje Aven University of Stavanger, Norway PSAM9 Hong Kong.](https://reader035.fdocuments.us/reader035/viewer/2022062518/56649e8f5503460f94b938a1/html5/thumbnails/14.jpg)
Scientific Risk Community:
What is Risk?
P,E
(A,X,P)
A,X
A: Event, X: consequences of A
(A,X,U)
![Page 15: What is Risk? Different perspectives and implications for risk management Terje Aven University of Stavanger, Norway PSAM9 Hong Kong.](https://reader035.fdocuments.us/reader035/viewer/2022062518/56649e8f5503460f94b938a1/html5/thumbnails/15.jpg)
• Risk is combination of probability of an event and its consequences (ISO 2002)
• Risk is a measure of the probability and severity of adverse effects
• Risk is defined as a set of scenarios s of which has a probability p and a consequence c
What is Risk?
(A,X,P)
A: Event, X: consequences of A
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•What is the meaning of P?
What is Risk?
(A,X,P)
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Probability of an
attack next year
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P(falling)
1000 m
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What is a probability?
Relative frequency interpretation
Subjective probabilities
P* of P P(A|K)
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Jacob Bernoulli (1654-1705)
Goal: Determine probabilities with a high level of accuracy
Moral certainty
From gambling to the real world
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What is risk?
Relative frequency interpretation
Subjective probabilities
(A,X,P)
(A,X,P,P*,U(P,P*),K)
Pf, P(Pf) – probability of frequency approach
(A,X,P,K)
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Scientific Risk Community:
What is Risk?
(A,X,U)
Risk description: (A,X,U,P,K)
Aven 2007, Aven and Renn 2008
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Nassim N. Taleb
•Mediocristan (Normalistan)
•Extremistan
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Uncertainties in phenomena and processes
P(health problems | K) =0.01
Surprises
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P,E S U
K
Risk description
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Effect on Risk Management (A,X,U,P,K)
• A broader risk picture
• ”Mechanistic” use of risk
assessment cannot be justified
• More management involvement
• Serve the industry? Society? LNG-plant
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ALARP
• Risk shall be reduced to a level that is as low as
reasonably practicable
• ”Grossly disproportionate”,
E[Costs] E[Benefits]U?
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What is Risk?
Should we search for one universial perspective?
ISO (2007) draft: risk is the effect of uncertainty on objectives
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Development trends
• Broader risk perspective
• Uncertainty assessments– Flage, R., Aven, T. and Zio, E. (2008) Alternative Representations of
Uncertainty in Reliability and Risk Analysis – Review and Discussion. ESREL 2008
• Incorporating human and
organisational factors
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Wiley 2008