Awareness of risk is probably greater today than it has ever been, and the assessment and management of risk-whether or not we think of it as risk-has become common in the lives of many of us. The first part of this paper notes that risk is never about predictable losses, or about either predictable or unpredictable gains; nor is risk a probability. Rather, risk is either a condition of, or a measure of, exposure to misfortune-more concretely, exposure to unpredictable losses. However, as a measure, risk is not one-dimensional-it has three distinct aspects or “facets” related to the anticipated values of unpredictable losses. The three facets are Expected Loss, Variability of Loss Values, and Uncertainty about the Accuracy of Mental Models intended to predict losses. This paper illustrates these three facets of risk by the use of three simple card-game “thought experiments”. An assessment of risk which does not consider all three of these facets is at least incomplete, and can be misleading. The second part of the paper presents an example of how the three-facets-of-risk concept applies specifically to a safety assessment of a mission of an engineered system. The author believes that each risk of interest should be characterized explicitly by a well-defined Risk Event-an event defined by an event assertion which clearly specifies the causes and/or loss values intended to be included within the scope of a particular risk. It is pointed out that the widely-used formula “Risk = Probability × Severity” does not even recognize the second and third facets of risk. Nor does the formula make clear how to address the many practical situations in which a variety of possible causes (Hazardous Events, Outcome Events, and Tragic Events) of losses, and/or a variety of possible resulting Loss Values, are of interest. Furthermore, “Severity” in the formula is often interpreted to mean the greatest possible Loss Value which can be caused by a Hazardous Event-and that interpretation can yield conclusions which are either significantly optimistic or pessimist.


    Access

    Check access

    Check availability in my library

    Order at Subito €


    Export, share and cite



    Title :

    The Three Facets of Risk


    Additional title:

    Sae Technical Papers


    Contributors:

    Conference:

    World Aviation Congress & Exposition ; 2000



    Publication date :

    2000-10-10




    Type of media :

    Conference paper


    Type of material :

    Print


    Language :

    English




    The three facets of risk

    Yellman, Ted | AIAA | 2000


    The Three Facets of Risk

    Yellman, T. W. / Sociewty of Automotive Engineers of New York / American Institute of Aeronautics and Astronautics | British Library Conference Proceedings | 2000


    Three facets of Selespeed

    Langois,A. / Magneti Marelli,IT | Automotive engineering | 2001


    Globalization:some facets

    Choi,S.Y. / Parolini,D.L. / Kia Engng.Detroit,US et al. | Automotive engineering | 1996


    Globalization: some facets

    Online Contents | 1996