Hazard management and risk design by optimal statistical analysis

Cheng Wu Chen, Kevin Fong Rey Liu, Chun Pin Tseng, Wen Ko Hsu, Wei Ling Chiang

Research output: Contribution to journalArticlepeer-review

16 Scopus citations

Abstract

Elicitation methods are used in decision making with respect to risk hazards to allow a researcher to infer the subjective utilities of outcomes from the observed preferences of an individual. A questionnaire method is presented, in this study, which takes into account the inevitable distortion of preferences by random errors and minimizes the effect of such errors. Under mild assumptions, the method for eliciting the utilities of many outcomes is a three-stage procedure. First, the questionnaire is utilized to elicit responses from which a subjective score is defined. Second, individual risk factors are discussed. Finally, the regression model presents individual risk preferences given the overall organizational risk culture, risk management policy, risk identification, and risk analysis. This paper addresses how company managers face risk and their tolerance of risk with respect to risk management.

Original languageEnglish
Pages (from-to)1707-1716
Number of pages10
JournalNatural Hazards
Volume64
Issue number2
DOIs
StatePublished - Oct 2012

Keywords

  • Computer aided
  • Financial insurance
  • Risk hazard assessment

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