Risk, Risk Perception, Risk Management – a Review of the Literature

Vasvári, Tamás (2015) Risk, Risk Perception, Risk Management – a Review of the Literature. Public Finance Quarterly = Pénzügyi Szemle, 60 (1). pp. 29-48.

PDF - Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader


Risks have become an integral part of our society. In this context, the aim of this paper is to provide a summary of the findings of risk research conducted in different fields of study and to trace the effect of these findings on risk management practices. The basic approaches to risk presented in this paper show that the notions of probability employed in studying processes in any area of life belong in the province of epistemology rather than ontology. Therefore, subjectivity cannot be completely excluded from risk management. This inherent subjectivity influences willingness to take risks as well as decision-making and risk evaluation. If we conceive of risks as mass phenomena, we have a number of objective (quantitative) methods at our disposal to estimate their probability and effect. However, the significance of subjective (qualitative) professional judgment increases as the volume of available data decreases. Regardless of the risk analysis method used, it is a basic principle that the costs of risk management should not be higher than the risk itself which in turn determines also the scope of the risk analysis to be carried out.

Item Type:Article
Uncontrolled Keywords:risk, uncertainty, decision-making
JEL classification:D81 - Information, Knowledge, and Uncertainty: Criteria for Decision-Making under Risk and Uncertainty
G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
ID Code:8850
Deposited By: Alexa Horváth
Deposited On:18 Sep 2023 11:25
Last Modified:18 Sep 2023 11:25

Repository Staff Only: item control page


Downloads per month over past year

View more statistics