Safety and behavioral risk management - The bounds of classical risk management and the importance of a behavioural approach
3 important questions on Safety and behavioral risk management - The bounds of classical risk management and the importance of a behavioural approach
In ERM, there are two types of biases:
- Psychological biases
- Group Decision-making
Behavioral risk management (BRM):
Accepts and confronts the reality of bias in the decision-making process
In Risk identification there are the following kinds of risks:
- Knightian risk: the situation where probabilities are given (objective data)
- Knightian uncertainty: states are naturally defined or can simply be constructed, but probabilities are not measured (bayesian statistics)
- Structural ignorance: states are neither naturally given nor easily constructed by the decision-maker (bayesian statistics)
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