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Proceedings of the Eighth International Conference on Probabilistic Safety Assessment & Management (PSAM)

Michael G. Stamatelatos
Michael G. Stamatelatos
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Harold S. Blackman
Harold S. Blackman
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ASME Press
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This paper defines an abstract paradigm, and uses it to illuminate how risk should be considered in making decisions. The particular focus is on decisions by organizations with responsibility for controlling risks. This paradigm also is of use in providing insight into how the acceptability of risk varies in different situations.

The significance of risk to an individual depends on a number of factors, among these are:

1) Who gets the benefit?

2) Who gets the risk?

3) Who controls the risk?

By “control” is meant the power to decide whether to undergo the risk. To have true control one must understand the risk, hence control as used here means informed control. Below we define five archetype situations which vary in terms of who gets the risk, the benefit, and who has control. The paper will discuss the insights that can be gained by applying basic decision principles to the archetype situation defined in the paradigm.

Subject to the constraint that all of the risk, benefit, and control be assigned to one person, there are exactly five ways to distribute these attributes depending on how many ‘persons’ we allow. The risk, benefit, and control may all be assigned to one person (RBC); or each may be assigned to a separate individual for a total of three persons (R-B-C); or there may be just two persons, for which there are three possible combinations (RB-C, RC-B, and BC-R).

Archetype Situation 1 Regulated Imposed Risk - 3 persons:

In this archetype, person 1 gets the benefit, person2 gets the risk, and person3 has control. This situation occurs when person 1 is a regulated activity, person2 is an affected individual, and person3 is the regulator.

Archetype Situation 2 Proxy Risk Tradeoff - 2 persons:

In this situation, person 1 gets both benefit and risk, but person2 has control. This situation arises in medicine, where the physician acts on behalf of patient in trading off risks and benefits.

Archetype Situation 3 Rescue - 2 persons:

Person 1 gets the benefit; person2 incurs risk but has control. This situation arises for rescuers who work in hazardous environments.

Archetype Situation 4 Unregulated Imposed Risk - 2 persons:

Person 1 gets the risk; but person2 gets the benefit and has control. This is an inherently undesirable situation, as there is a conflict of interest for person2, who may thus not sufficiently limit personl's risk.

Archetype Situation 5 Voluntary Risk Tradeoff - 1 person:

Person1 gets the benefit and risk and has control. Here there is no conflict of interest, nor need for regulation. The person simply is making a personal risk-benefit tradeoff decision, as in parachute jumping for recreation.

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