Making decisions in the face of uncertainty: Understanding risk

Making decisions in the face of uncertainty: Under...
01 May 2016

This paper is Part 1 in a series of three discussion papers that aims to provide a broad frame of reference for discussion of risk in the New Zealand context. The over-arching theme of the series is ‘decision-making under uncertainty’, because some degree of uncertainty underlies virtually all choices we make, both as individuals and collectively as a society.

This first paper deals with the fundamental problem of defining and interpreting ‘risk’ itself, and how it is understood and assessed from both scientific and popular perspectives. The objective is not to analyse any particular risk or type of risk, but rather to clarify the conceptual frameworks and processes that allow decisions to be made when outcomes are not completely knowable at the time. A greater understanding of the concepts of risk, hazard, potential impact (consequences), vulnerability and exposure, and the value, but also the limits of scientific knowledge, provides a basis for individuals and communities to better consider the trade-offs between risks and benefits, allowing them to formulate responses to many decisions that we must make as individuals and as a society, and in particular in relationship to many core issues that challenge New Zealand society.

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