Transcript Risk - TransConflict

Risk perception
Vladimir Ninković
Transconflict
 What are risks and hazards?
 How do we estimate it?
Risk as a concept
Risk society
The world of manufactured uncertainty, the society where in the first
place we become more and more aware of the technological and scientific
risks and hazards we are surrounded with and, in the second place, the
society where such risks are rapidly increasing
We live in a society which is no longer turned towards the past, but towards
the future, in which individuals have acquired considerable autonomy and
are encouraged to take their lives in their own hands - we must constantly
think ahead and remain alert to both risks and opportunities.
In such society it is no wonder that the psychology and perception of risk
comes into focus of the research.
Risk - definitions
There are many definitions of risk that vary by
•specific application and
•situational context.
The widely inconsistent and ambiguous use of the word is one of several current
criticisms of the methods to manage risk.
One is that risk is an issue, which can be avoided or mitigated (wherein an issue is
a potential problem that has to be fixed now.)
Risk is described both qualitatively and quantitatively.
In some texts risk is described as a situation which would lead to negative
consequences.
Quantitatively, risk is proportional to both the expected losses which may be caused by
an event and to the probability of this event. Greater loss and greater event likelihood
result in a greater overall risk.
Risk - definitions
In engineering the definition risk often simply is:
R = probability of an accident X losses per accident
or in more general terms:
R = probability of event occuring X impact of event occuring
Risk - definitions
Financial risk is often defined as the unexpected variability or volatlity of returns and
thus includes both potential worse-than-expected as well as better-than-expected
returns.
In statistics, risk is often mapped to the probability of some event which is seen
as undesirable. Usually, the probability of that event and some assessment of its
expected harm must be combined into a believable scenario (an outcome), which
combines the set of risk, regret and reward probabilities into an expected value
for that outcome.
In information security a risk = an asset, the threats to the
asset and the vulnerability that can be exploited by the threats to impact the asset –
The risk is then assessed as a function of three variables:
1. the probability that there is a threat
2. the probability that there are any vulnerabilities
likelihood
3. the potential impact to the business.
If any of these variables approaches zero, the overall risk approaches zero.
 Threats, weaknesses, vulnerabilities
 Fundamental threat to the protected values.
 State of the system created by the negative conditions
of an environment that can lead to incident or accident.
1. Increased understanding of human influence on
hazards
2. Worsening worst cases.
3. Unintended side effects.
4. Changing of portfolio of hazards
Risk perception

In psychology, risk has largely been studied within the context of a cognitive research paradigm.

For psychological theorists, risk is defined as a real and objective entity, and hence amenable to
quantitative analysis. Psychologists have traditionally tried to understand risks by either isolating
some aspect of the phenomenon (a variable), and then simulating this either in a laboratory as
an experiment, or through the collection and analysis of data through social surveys = risk
perception

The psychology approach began with research in trying to understand how people process
information. These early works maintain that people use cognitive heuristics in sorting and
simplifying information which lead to biases in comprehension.

Several theories have been proposed to explain why different people make different estimates
of the dangerousness of risks. Besides early theories, three major families of theory have been
developed:
•
psychology approaches (heuristics and cognitive),
•
anthropology/sociology approaches (cultural theory) and
•
interdisciplinary approaches (social amplification of risk framework).
Early theories –
A key early paper was written in 1969 by Chauncey Starr.
His major finding was that people will accept risks 1,000 greater if they are
voluntary (e.g.driving a car) than if they are involuntary (nuclear disaster).
This early approach assumed that individuals behave
in a rational manner, weighing information before making
a decision. Individuals have exaggerated fears due to
inadequate or incorrect information.
 Daniel Kahneman and Amos Tversky performed a
series of gambling experiments to see how
people evaluated probabilities.
 Major finding -people use a number of heuristics
(shortcuts for thinking) to valuate information
that are usually useful, but they may lead to
inaccurate judgments in some situations –
becoming cognitive biases.
 Lisa Lopes – motivations influencing choice
 Risky choice
 Risk averse “pessimists” vs Risk seeking “optimists”
 Problem – we cannot compare behavior and
response of a subject in a laboratory and its
naturalistic response outside of it
 A psychometric study is one where the psychological
variables in relation to a phenomenon are collected and
measured from individuals in a sample population
 This approach has attempted to consider the qualitative
characteristics of hazards.
 A survey performed in late 70’s found that subjects had
a tendency to overestimate the death rates from low
frequency hazards such as smallpox vaccinations and
floods, while underestimating the death rates for high
frequency hazards such as strokes and heart diseases.
 Psychometric studies began to demonstrate the
complexity of factors mediating the understanding of
risk among the general population.
 Perceptions of risk could be measured and the results
were replicable.
 However, there were methodological problems with this
type of approach. The respondents are restricted to
giving their views only on the basis of hazards
mentioned. Other risks which respondents might also
consider to be real would not necessarily be considered.
The anthropology/sociology approach posits risk perceptions as
produced by social institutions. Cultural values, and ways of life.
Cultural Theory of risk is based on the work of anthropologist Mary Douglas
and political scientist Aaron Wildavsky first published in 1982[.
Four “ways of life” - grid/group arrangement.
Each way of life corresponds to a specific social structure and a particular outlook on risk
Grid categorizes the degree
to which people are constrained and circumscribed in their social role. The tighter binding
of social constraints limits individual negotiation. Group refers to the extent to which
individuals are bounded by feelings of belonging or solidarity. The greater the bonds,
the less individual choice are subject to personal control.
Four ways of life include: Hierarchical,
Individualist,
Egalitarian, and
Fatalist.
Risk perception researchers have not widely accepted Cultural theory. Even Douglas
says that the theory is controversial; it poses a danger of moving out of the favored
paradigm of individual rational choice of which many researchers are comfortable
The Social Amplification of Risk Framework (SARF), combines research
in psychology, sociology, anthropology, and communications theory.
SARF outlines how communications of risk events pass from the sender
through intermediate stations to a receiver and in the process serve to
amplify or attenuate perceptions of risk.
All links in the communication chain, individuals, groups, media, etc., contain filters
through which information is sorted and understood.
The theory attempts to explain the process by which risks are amplified, receiving
public attention, or attuned, receiving less public attention.
The main thesis of SARF states that risk events interact with individual psychological,
social and other cultural factors in ways that either increase or decrease public
perceptions of risk. Behaviors of individuals and groups then generate secondary
social or economic impacts while also increasing or decreasing the physical risk itself.
These ripple effects caused by the amplification of risk include enduring mental
perceptions, impacts on business sales, and change in residential property values,
changes in training and education, or social disorder.
Public distortion of risk signals provides a corrective mechanism by which society
assesses a fuller determination of the risk and its impacts to such things not
traditionally factored into a risk analysis
 Amplification - a process during which “events
pertaining to hazards interact with psychological,
social, institutional and cultural processes in ways
that can heighten or attenuate public perceptions
of risk and shape risk behavior.
 Pidgeon et al. “Royal Society Report”, 1992.
 Involuntary exposure to risk
 Lack of personal control
 Uncertainty
 Lack of personal experience
 Difficulty in imagining risk exposure
 Delayed effects
 Genetic aspects of exposure
 Catastrophic potential
 Benefits not highly visible
 Benefits go to others
 Human failure
 Covello and Sandman added nine more factors:
 Victim identity
 Trust
 Personal stake
 Ethical/moral nature
 Effects on children
 Dread
 Media attention
 Accident history
 Reversibility
 Covello & Sandman:
RISK = HAZARD + OUTRAGE
References
Douglas, Mary. Risk Acceptability According to the Social Sciences. Russell Sage Foundation, 1985.
"Social Benefits versus Technological Risks" in Science Vol. 165, No. 3899. (Sep. 19, 1969), pp. 1232–1238
Freudenburg, William R., “Risk and Recreancy: Weber, the Division of Labor, and the Rationality of Risk
Perceptions.” Social Forces 71(4), (June 1993): 909–932.
Tversky, Amos and Daniel Kahneman. “Judgment under Uncertainty: Heuristics and Biases.” Science
185(4157) (September 1974): 1124–1131.
Slovic, Paul, Baruch Fischhoff, Sarah Lichtenstein. “Why Study Risk Perception?” Risk Analysis 2(2)
(1982): 83–93.
Slovic, Paul, ed. The Perception of Risk. Earthscan, Virginia. 2000.
Gregory, Robin & Robert Mendelsohn. “Perceived Risk, Dread, and Benefits.” Risk Analysis 13(3)
(1993): 259–264
Wildavsky, Aaron and Karl Dake. “Theories of Risk Perception: Who Fears What and Why?” American
Academy of Arts and Sciences (Daedalus) 119(4) (1990): 41–60.
Douglas, Mary and Aaron Wildavsky. Risk and Culture. University of California Press, 1982.
Thompson, Michael, Richard Ellis, Aaron Wildavsky. Cultural theory. Westview Press, Boulder,
Colorado, 1990.
Douglas, Mary. Risk and Blame: Essays in Cultural theory. New York: Routledge, 1992.