The perceiver’s social role and a risk’s causal structure as determinants of environmental risk evaluation

We present a dual-process risk perception model that integrates cognitive and emotional as well as consequentialist and deontological components by distinguishing between two modes of evaluative processing: (a) a consequentialist evaluation that focuses on potential consequences and (b) a deontological evaluation that focuses on moral values. Each of these two modes is assumed to trigger specific cognitive evaluations, specific emotions, and specific behavioral tendencies concerning a perceived risk. We conducted an experiment (N = 270) that tested whether the relative dominance of the two evaluative modes would depend on the causal structure of the environmental risk being evaluated and on the social role of the evaluator. Three types of causal structure were varied by providing scenario information: (a) anthropogenic risks that endanger only nature, (b) naturally caused risks with potential harmful consequences for humans, and (c) anthropogenic risks that may harm humans. Participants evaluated each scenario from the perspective of one of three social roles: mayor, expecting parent, and environmental activist. For each scenario, participants specified their focus and evaluated the event’s morality and perceived risk, the intensity of specific emotions, and their preferences for prospective behaviors. Results showed that the consequentialist evaluation was generally stronger than the deontological evaluation and was less affected by the experimental manipulations. The deontological evaluation was substantially affected by the risk’s causal structure. It was stronger for anthropogenic than for natural causation; risks caused by humans were associated with greater perceived moral blameworthiness, more intense morality-based emotions (e.g. outrage), and a stronger tendency to perform agent-related behaviors (e.g. aggression) than naturally occurring risks. The effect of the social role was less pronounced than that of the causal structure. Furthermore, the effect of an evaluative focus on behavior was fully mediated by emotions for deontological evaluations and partially mediated for consequentialist evaluations. The implications for environmental risk perception and communication are discussed.     

Critical factors and pathways influencing genetically modified food risk perceptions

This study aims to identify the critical factors and paths that affect the Chinese public’s risk perceptions of genetically modified (GM) foods from an emotional appraisal perspective. Using an experiment conducted with university undergraduate business students in China, we examined the evaluative pathways of the Chinese public by manipulating fairness and controllability appraisals in scenarios constructed about GM foods risk. The experiment was designed around two evaluative pathways – consequentialist and deontological perspectives – focusing on controllability and fairness. This led to a distinct set of emotional responses. It was found that both consequence-based and morality-based emotions caused stronger perceived risks toward GM foods. Understanding these responses provides new insight into how scientists and experts in China might best frame their communications about GM foods.     

Characterization of unknown unknowns using separation principles in case study on Deepwater Horizon oil spill

Unidentified risks, also known as unknown unknowns, have traditionally been underemphasized by risk management. Most unknown unknowns are believed to be impossible to find or imagine in advance. But this study reveals that many are not truly unidentifiable. This study develops a model using separation principles of the Theory of Inventive Problem Solving (whose Russian acronym is TRIZ) to explain the mechanism that makes some risks hard to find in advance and show potential areas for identifying hidden risks. The separation principles used in the model are separation by time, separation by space, separation upon condition, separation between parts and whole, and separation by perspective. It shows that some risks are hard to identify because of hidden assumptions and illustrates how separation principles can be used to formulate assumptions behind what is already known, show how the assumptions can be broken, and thus identify hidden risks. A case study illustrates how the model can be applied to the Deepwater Horizon oil spill and explains why some risks in the oil rig, which were identified after the incident, were not identified in advance.     

The ‘Plateau‐ing’ of the European Better Regulation Agenda: An Analysis of Activities Carried out by the Barroso Commission

In this paper we examine cases commonly characterised as risk‐risk tradeoffs (i.e., creating new risks while solving existing ones), in an attempt to learn lessons that can be valuable for future regulatory decision‐making. A broad range of environmental and health literature was reviewed and numerous cases of proclaimed risk‐risk tradeoffs were analysed in order to determine: 1) why regulatory measures were initially taken, 2) why these measures caused a countervailing risk to emerge, 3) how tradeoffs could have been avoided, and 4) whether the case is a good example of a risk‐risk tradeoff. The analysis reveals that only a small number of these cases can actually be considered risk‐risk tradeoffs. In a large number of cases safer alternatives are and were available at the time decisions were made. In some cases the proclaimed risk‐risk tradeoff simply did not exist or occur, and in some cases countervailing risks were ignored for reasons unknown. In many cases, the countervailing risks could have been anticipated and avoided by proactively seeking safer alternatives, completing a tradeoff and impact assessment, or increasing stakeholder input in the decision‐making process. We conclude that concerns about risk‐risk tradeoffs are not a reasonable argument against future application of the precautionary principle. Indeed, sound decision‐making processes in the face of uncertainty should always consider and attempt to mitigate reasonable risk‐risk tradeoffs.     

Regulators as ‘agents’: power and personality in risk regulation and a role for agent‐based simulation

We critically examine how evidence and knowledge are brokered between the various actors (agents) in regulatory decisions on risk. Following a précis of context and regulatory process, we explore the role power and personality might play as evidence is synthesised and used to inform risk decisions, providing a review of the relevant literature from applied psychology, agent‐based simulation and regulatory science. We make a case for the adoption of agent‐based tools for addressing the sufficiency of evidence and resolving uncertainty in regulatory decisions. Referring to other environmental applications of agent‐based decision‐making, we propose how an agent model might represent power structures and personality characteristics with the attending implications for the brokering of regulatory science. This critical review has implications for the structuring of evidence that informs environmental decisions and the personal traits required of modern regulators operating in facilitative regulatory settings.     

Optimism and the perceptions of new risks

While many risks, especially new ones, are not objectively quantifiable, individuals still form perceptions of risks using incomplete or unclear evidence about the true nature of those risks. In the case of well known risks, such as smoking, individuals perceive risks to be smaller for themselves than others, exhibiting ‘optimism bias’. Although existing evidence supports optimism bias occurring in the case of risks about which individuals are familiar, evidence does not yet exist to suggest that optimism bias applies for new risks. This paper addresses this question by examining the gap in perceptions of risks individuals have for themselves versus society and the environment, conceptualised as social and/or environmental optimism biases. We draw upon the 2002 UEA‐MORI Risk Survey to examine the existence of optimism bias and its effects on risk perceptions and acceptance regarding five science and technology‐related topics: climate change, mobile phones, radioactive waste, GM food and genetic testing. Our findings provide evidence of social and environmental optimism bias following similar patterns and optimism bias appearing greater for those risks bringing sizeable benefit to individuals (e.g. mobile phone radiation) rather than those more acutely affecting society or the environment (e.g. GM food or climate change). Social optimism bias is found to reduce risk perceptions for risks that have received large amounts of media attention, namely, climate change and GM food. On the other hand, optimism bias appears to increase risk perceptions about genetic testing.     

国内外车险道德风险文献综述

由于车险市场中的信息不对称，道德风险对车险经营构成了重大威胁。因此，车险道德风险已成为国内外学者研究的热点问题。本文在对车险道德风险的内涵、风险因素、博弈分析、风险防范等进行详细综述的基础上，探讨了研究中存在的不足及未来的研究趋势。     

Default Risk Estimation,Bank Credit Risk,and Corporate Governance

This study explores the relationship between credit risks of banks and the corporate governance structures of these banks from the perspective of creditors. The cumulative default probabilities are estimated for a sample of US commercial and savings banks to measure their risk taking behavior. The results show that one year and five year cumulative default probabilities are time‐varying, with a significant jump observed in the year prior to the financial crisis of 2008–09. Generally speaking, corporate governance structures have a greater impact on US commercial banks than on savings institutions. We provide evidence that, after controlling for firm specific characteristics, commercial banks with larger boards and older CFOs are associated with significantly lower credit risk levels. Lower ownership by institutional investors and more independent boards also have lower credit risk levels, although these effects are somewhat less significant. For all the banks in our sample, large board size, older CFO, and less busy directors are associated with lower credit risk levels. When we restrict the sample to consider the joint effects of the governance variables, the results on board size and busy directors are maintained.     

Risk communication in dementia care: family perspectives

Family carers are often involved in decisions concerning the health and social care needs of people with dementia. These decisions frequently involve considering risks inherent in daily living situations and discussing these with care recipients and professionals. The purpose of this study is to understand the risks that present most concern to family carers; explore attitudes and approaches of this group towards risk; and examine how information about risks is shared between familial carers, care recipients and professionals working in dementia care. Five focus groups were held across Northern Ireland between April and July 2015 involving 22 carers. Risks of most concern were driving, falls, financial risks, getting lost and using electrical appliances. Concepts of ‘risk’ related to terms such as danger, harm and vulnerability with emphasis on consequences rather than likelihoods. The psychosocial benefits of taking risk were recognised by some participants. Discussion of risks with family members with dementia primarily involved bringing risk matters to the attention of the individual. Family carers talked with a wide range of professionals about risks. Divergences in perspectives were noted, particularly in relation to matters of health and safety. A model of risk communication is developed illustrating how this can play a key role in informed, shared decision-making where a family member has dementia, serving an important role in risk management processes in informal community dementia care.     

Executive compensation and non-financial risk: An empirical examination

Executives face potentially severe (non-financial) personal risks if firm environmental performance is below industry best practice. We examine the relation between CEO compensation and the non-financial risk associated with environmental exposure, and how use of environmental performance as an explicit determinant of compensation affects this relation. We find evidence that CEOs are compensated for exposure to environmental risk, even after controlling for financial risk. We also find that this premium is reduced when the CEO has greater opportunities to improve the firm’s environmental performance.     

我国商业医疗保险中的道德风险及对策

医疗行为的信息不对称以及疾病的客观性、严重性、复杂性、多样性等本质特征导致医疗保险成为道德风险发生频率最高、造成损失最大、又最难以有效规避风险的险种。道德风险是医疗保险市场失灵的重要表现。本文通过分析我国医疗保险市场逆选择和事后道德风险的不同形成原因,以期探讨有效的风险控制方法,从而降低商业医疗保险的经营风险,为促进其合理发展并最终满足居民更全面的健康需求提供帮助。     

Confidence,knowledge, and compliance with emergency evacuation

This article considers how risks are responded to through behavioral adaptations and avoidance strategies. We observe that such behavior can become totemistic and have a limited relationship to the risk it ostensibly answers to. Drawing upon examples such as recycling and original data from a study on drink‐spiking avoidance, the article sets out a new concept for discussing and understanding such risk‐related behavior: the ‘risk ritual’. We elaborate upon this concept in the article, identifying a number of tendencies in risk rituals and drawing upon anthropological and sociological work on the nature and uses of ritual. We compare the ‘risk ritual’ to religious and community rituals, exploring the connections between the former and the rain dance, religious ablutions, abstinence from eating meat on a Friday, and rite of passage ceremonies. Influenced by the cultural approach to risk, we argue that risk rituals, like rituals more generally, are shaped by social conditions, currents, and processes, such as the emphasis on personal responsibility for risk management and the desire to mark out the ‘sacred’ and the ‘profane’. The article concludes that ritualistic risk behavior is better viewed as functional rather than irrational.     

Shifting reactions to risks: a case study

Social science research in the field of risk analysis has emphasised evaluating the magnitude of individuals’ reactions to risks (e.g. strength and salience of concerns, frequency and forcefulness of behaviours that respond to risks). Fewer studies assess the factors that contribute to risk reactions or the types of risks to which reactions are directed (e.g. human health, wildlife health or ecosystem health risks; economic or aesthetic concerns). Theoretical and empirical research on amplification and attenuation of risk (e.g. the Social Amplification of Risk Framework) reveals that the strength of people’s reaction to risks can change markedly over time, as a function of new stimuli. We expand on this foundation to consider here how the types of risks members of the public react to may also shift over the course of their exposure to a hazard, particularly as more information about the hazard becomes available. This case study of risk reactions related to an outbreak of type E botulism in north-western Michigan, USA, demonstrates that the types of risks people react to can change substantially over time. We identify factors that contributed to changes in types of risk reactions, and then consider how these factors potentially distinguish the botulism outbreak from other outbreaks. This case study suggests that, under certain conditions, risk communication can meaningfully alter the types of risks that people react to in response to an environmental hazard. We discuss implications of these findings for risk research, risk communication and environmental conservation.     

Towards Analytic‐deliberative Forms of Risk Governance in the UK? Reflecting on Learning in Radioactive Waste

While participatory forms of risk assessment and management have been the focus of much conceptualisation, experimentation, and evaluation, relatively less effort has gone into understanding how so called ‘analytic‐deliberative’ processes are developing across policy‐for‐real decision contexts. This paper develops a novel typology of citizen‐science interaction as a basis for analysing the nature and extent of recent participatory risk assessment practice in the UK. It draws on the reflections of professional actors operating across the UK environmental risk domain, focusing down on practice in the area of radioactive waste between 1998 and 2003. Compared with past science‐centred approaches, analysis shows an ‘opening up’ of risk decision processes to extended actors, knowledges, and values, with particular importance placed on public involvement in front‐end framing. This is being constrained by a failure to integrate engagement throughout decision processes, the exclusion of publics from assessing/evaluating environmental risks, and the upholding of a strict separation between citizens/science. These patterns of analytic‐deliberative practice — determined by contextual influences, barriers and challenges operating across UK environmental risk issue‐areas — highlight the need for further methodological development and systematic evaluation of relations between processes and outcomes.     

The Allocation of Aggregate Risk,Secondary Market Trades,and Financial Boom–Bust Cycles

The financial crisis of 2007–08 started with the collapse of the market for collateralized debt obligations backed by subprime mortgages. In this paper we present a mechanism aimed at explaining how a freeze in a secondary debt market can be amplified and propagated to the real economy, and thereby cause a recession. Moreover, we show why such a process is likely to be especially strong after a prolonged expansion based on the growth of consumer credit and endogenously low risk premia. Hence, our model offers a new perspective on the links between the real and financial sectors, and we show how it can help make sense of several macro‐economic features of the 2001–09 period. The key elements of the model are heterogeneity across agents in terms of risk tolerance, a financial sector that allocates systematic risk efficiently across agents, and real decisions that depend on the price of risk.     

Determining overall risk

The risk journal literature lacks a clear and simple account of the conceptual issues involved in determining the overall risk of an action, and in explaining how risk is additive. This article attempts to bring a measure of clarity to these issues in as basic and non‐technical a way as possible. First of all, the view that risk is ‘expected harm’ is explained. The view that risk is a quantitative concept is then defended. The distinction between the risk run by doing action A in respect of possible outcome x, and the overall risk run by doing action A in general is explained, as is the position that the overall risk of A is determined by summing the risks of each possible harm that A could give rise to. The article then explains how risks can be summed over time, as long as the probabilities involved are determined according to probability theory. Finally, the article explains that in a doing a risk‐benefit analysis of A, positive aspects of a possible outcome x, where x is harmful on balance, must be incorporated into x's level of harm rather than incorporated into the benefit side of the risk‐benefit analysis of A.     

Environmental disclosure and environmental risk: Sceptical attitudes of UK sell-side bank analysts

In responding to the mixed evidence on the decision-usefulness of environmental disclosures to capital market participants, this paper examines the decision-usefulness, to sell-side bank analysts, of annual report environmental narratives. In doing so it focuses mainly on the materiality of environmental reporting and the perceived importance of environmental risks in the assessment of bank risk profile and valuation. Noting that banks themselves have recognised the importance of environmental filtration of loan decisions, this paper seeks to examine the attitudes of a prominent reporting user group (19 London-based sell-side bank analysts) towards environmental reporting and the materiality of environmental risks. Findings showed that recognition of the materiality of environmental risks in banks is uncommon among sell-side analysts and that environmental narratives are often ignored and regarded as perfunctory. The findings are discussed in terms of the role of analysts in the reporting information ‘supply chain’ and how the analysts’ frame of reference may limit the inclusion of longer-term issues, such as the environment, in their analysis.     

A Framework for Identifying (and Avoiding) Fraudulent Financial Reporting*

This commentary analyzes the relationship of fraud risk assessments to other risk assessments by auditors. The Public Company Accounting Oversight Board notes that this is a problem area of current practice. Effective detection of fraudulent financial reporting requires an integrative accounting/auditing conceptual framework. As a result, this paper is as much about accounting theory as it is about auditing. To simplify the development of such an integrated framework, this paper uses an expanded risk model. This effectively results in a risk perspective on fraudulent financial reporting. There are many potential implications but the major findings are as follows. First, the study identifies the crucial role of benchmarks based on acceptable levels of risk to help differentiate between intentional and unintentional misstatements. Such differentiation is critical to successfully implementing the American Institute of Certified Public Accountants' Statement on Auditing Standards (SAS) No. 99 and international standards ISA Nos. 240, 540, and 700. Second, the paper shows the importance of not allowing the major categories of risks identified here from getting too high. This paper explains the need to set acceptable levels of these risks, either by standard‐setters as a matter of broad policy, or by individual practitioners as part of the terms of specific engagements. I propose that a major factor in the concept of “present fairly” be the acceptable levels of accounting risks that are defined here, especially the risks due to intentional forecast errors. Third, this paper clarifies how the fraud risk of SAS No. 99, and similar international standards, relates to the current audit risk model framework.     

Views of Risk in Sweden: Global Fatalism and Local Control — An Empirical Investigation of Ulrich Beck's Theory of New Risks

Ulrich Beck's theory of risk society has been criticised because there is lack of empirical evidence. By comparing people with different life contexts and experiences, the aim of this study was to investigate how these people view risk, and if ‘new’ risks are perceived differently by different groups in society. Five focus‐group interviews were conducted in Sweden, in 2004/05, with people in rural and urban areas, people with a foreign background and experts. The groups consisted of four people each and lasted for two hours. The results show that ‘new’ risks are not something people worry about; ‘risk’ is associated with personal experiences and life context. This indicates a traditional or at least modern way of viewing risk, and contradicts the idea of a reflexive view of risk. However, a division between the urban versus the rural‐migrant groups appears: the expert‐urban groups show a more global—fatalistic strategy to handle of risk, while the rural—migrant group shows a more traditional approach to risk, where control and the local context are in focus.     

What role for social scientists in risk expertise?

When it comes to risks – health and environmental risks, like those linked to the use of nanotechnologies, pesticides, etc. – three main groups of actors are easily identified, brought together through boundary organisations such as environmental and sanitary risk agencies: the natural and technical scientists, who provide their expertise to assess risks (especially toxicologists, epidemiologists and microbiologists); the policy makers, who take decisions regarding risk management and risk regulation; the lay public, who are more and more involved in participatory frameworks. Sometimes three other groups of actors are added: the ‘economists’ who can for instance conduct cost–benefit assessments or multi-criteria analyses (especially ecological economists, public economists, political economists and social economists); the ‘philosophers’/‘ethicists’ who can use ethics to highlight moral choices and responsibilities in face of risks; and the ‘jurists’/‘legal experts’ who can justify authorisation or interdiction according to law. Inversely, there is a group of actors which is not clearly identified, that of social scientists, even though a considerable quantity of social science knowledge on risk has been produced. Why is there such a discrepancy? This article, based on a critical review of the literature, aims to make sense of the fuzziness surrounding the involvement of social scientists when it comes to risk expertise. The article shows that one reason for this puzzling situation is to be found in the gap between what social scientists often want to do when they are called in as risk experts and what natural scientists and public policy makers actually expect from them.