Understanding the implications of low knowledge and high uncertainty in risk studies

Abstract

Risk analysis has existed for thousands of years and will continue to grow in importance across professions and industries. Of special importance is the need to understand and manage risk when there is low knowledge and high uncertainties. Even with pristine and high-quality risk analysis in these situations, integrity and credibility can be questioned, and risk events can happen. Although these issues do not prove some shortcoming in risk analysis and risk management, they can directly impact the risk analyst and decision-makers. The risk literature has addressed the issues of defining and promoting integrity and credibility for risk studies, but there is little existing guidance for the analyst when handling the commonly encountered low knowledge and high uncertainty contexts. In this article, we explore the implications of low knowledge and high uncertainty in risk studies to understand how the risk analyst can acknowledge those features in a risk study, with recognition that those features may be questioned later. The topic of this article will be of interest to risk managers, professionals, and analysts in general who are tasked with analyzing and communicating with studies.