The risk thermostat – a balancing perspecive on risks and perception
Today I would like to share John Adams‘ inspiring perspective on risks. He basically argues that rewards and accidents/losses are consequences of risk taking. Rewards influence the propensity of a person to take risks. Risk propensity varies from every person to another. On the other hand, failures and losses influenced the perceived danger. Both influence the so-called balancing behavior. Using this model, John Adams argues that today’s institutional risk management is only focusing on the lower part – the accident reducing loop. This will result in a useless pursuit of “safety at any costs”.
John Adams has blogged several interesting articles on risk in general and many other articles worth reading.