Subjective Assessments and Objective Yardsticks: A Contribution to Risk Theory Inspired by the Philosophy of the East

Abstract

The difference between the hope of expectation and mathematical hope, as pointed out by Daniel Bernoulli in 1738 and by Harald Westergaard in 1876, and its influence on the discussion of utility is considered.

The subjective elements and the objective factors in cases of risks are taken up. A digest for the evaluation of major hazards as seen from the three viewpoints, the individual, relations between individuals and the relations between individual and surroundings, is discussed.

As essential elements in the decision process, the importance of voluntary and involuntary risk, pareto optimization, the size of solidarity, the absolute size of the damage and the distrust of experts is pointed out in the paper in the evaluation of major hazards-in other words, a simultaneous application of multi-decision strategies, e.g. Bayes, min-max and Hurwitz criteria.

The number of members standing shoulder-to-shoulder in the group is emphasized as a numerical factor in the evaluation.