Risk perception is the tendency for people to have different dramatically estimates of risk probability and impact given the same information. The following are the important factors that are known to impact risk perception.
Outlook, Sour Grapes, Ambiguity, False Analog, Survivorship Bias,
Mere Exposure Effect, Curse of Knowledge, Magical Assumptions and motivated reasoning
How much they affect the risk analysis and risk treatment as well as risk management strategy
Has most work in the area of risk perception been "theoretical" based on "questionnaire (survey) studies"?
We can identified the factors affecting the risk perception or creating the bias by capturing the case studies of failures in an industry or organization. we usually do not like to discuss the failures or record the failures and analyse them and disseminate the information across the organisation to avoid the perception bias.
There will be human behavioural explanations for those, and other, biases. For literature on that I would start with Daniel Kahneman, who by the way is a Nobel prize winner in behavioural economics and is alive and well here on Researchgate.
So how can we manage biases in risk analysis? We probably cannot eliminate them completely. But a couple of techniques for reducing negative impacts would involve mathematics. I.e. future probability estimates based on past data (eg how often do we expect a risk to occur over the next ten years based on the last 100 years' experience data). And Monte Carlo which can be used to introduce +/- randomness into collective estimations.
Article Prioritizing risks for the future using Monte Carlo simulati...
Dear Krishna Murari
Risk perception is a human process. The human is an emotional machine, so it will be very sensitive to several external and internal factors. So there are techniques that can reduce these biases to improve risk management.
Please consult my publications in risk management
Dear Adel,
As I know, both cognitive and emotional factors work in risk perception. In organizational context, Project managers take risks based on the values of the organization, their personal values, threat to their survival and success, rewards, capability to transfer the blame in case of failure, venerability of peers/superiors/subordinates, etc. In personal level, people take risk based on social norms, their value system, benefits and losses, wants and needs, chances of failure, etc. I have gone through many good and experiences of risk perception and risk management in my 34 years of professional career.
Dear Krishna Murari
I recognize many of your variables that fit in the internal and external factors (for the human or the company). Thank you!
- Badges
- Science topic
- Similar topics
- Philosophy
- Philosophy Of Science
- Reasoning