Essay on Risk Analysis And Risk Management In An Uncertain World

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Risk Analysis, Va!. 22, No.4, 2002

Perspectives

Risk Analysis and Risk Management in an Uncertain World l
Howard Kunreuther*

The tragic attacks o[ September 11 and the bioterrorist threats with respect to anthrax that followed have raised a set of issues regarding how we deal with events where thcre is considerable ambiguity and uncertainty about the likelihood of their occurrence and their potential consequences. This papcr discusses how one can link the tools of risk assessment and our knowledge of risk perception to develop risk management options [or dealing with extrcmc events. In particular, it suggests ways that the members of the Society for Risk Analysis can apply thcir expertise and talent to the risks associated with terrorism and discusses the changing roles of the public and private sectors in dealing with extreme events.

1. INTRODUCTION

• How can we link the tools of risk assessment and our knowledge of risk perception to develop risk management options that are likely to be successfully implemented?
• What are the changing roles of the public and private sectors in dealing with these risks?
• How can we utilize lessons from dealing with past extreme events in helping to plan for the future? I am honored to receive the Distinguished
Achievement Award from the Society for Risk Analysis (SRA). SRA is a unique organization because its membership is drawn from the physical and biological sciences, engineering, and the social sciences.
This blend of researchers and practitioners provides an opportunity for creative dialog with respect to a wide variety of problems involving risk analysis and risk management in an uncertain world.
The tragic attacks of September 11 and the ensuing bioterrorist threats associated with anthrax have raised a set of issues regarding how we deal with events where there is considerable ambiguity and uncertainty about the likelihood of their occurrence and their potential consequences, The following questions should be addressed in order to develop meaningful strategies for dealing with these extreme events:

I believe SRA can help develop strategies for coping with the fallout from these unprecedented events.
This paper will address the challenges and opportunities for SRA in playing this leadership role. Rather than referencing the wide range of relevant papers that have appeared in Risk Analysis and other journals on the topics discussed here, I have listed a selected set of recent books and papers, many of which provide a comprehensive list of references relevant to the topics discussed in this paper.
2. RISK ASSESSMENT 2

This article is the text [rom a speech given by Dr. Kunreuther on
December 3, 2002, at the annual meeting of the Society for Risk
Analysis (SRA) held in Seattle, Washington. The speech was given
[allowing Dr. Kunreuther's acceptancc of the SRA Distinguished
Achievement Award (co-recipient with Dr. Suresh Moolgavkar).
* Center for Risk Management and Decision Processes, The
Wharton School, University of Pennsylvania, Philadelphia, PA
19107; Visiting research scientist, Columbia University.
I

One of the cornerstones of SRA's success has been the many contributions that the membership has made to the area of risk assessment, ranging from
2 See Haimes (199R) [or a comprehensive summary o[ recent work in risk assessment.

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2002 Society for Risk Analysis

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Kunreuther

early studies of fault and event trees for nuclear power to National Academy studies on understanding risk
(National Research Council, 1996).

to see if there is a degree of consensus on the nature of the risk.
2.2. Use of Exceedance Probability (EP) Curves

2.1. Nature of the Field
The field of risk assessment encompasses studies that estimate the chances of a specific set of events occurring and/or their potential consequences. For those like myself who are users rather than creators of risk assessments and vulnerability studies, we need to appreciate that…