Sunday, October 12, 2008

Effective Risk Management

Recently, this video has been making the rounds, causing quite a stir on various internet message boards.

While I fully appreciate the efforts of the author to explain global Climate Change through the lens of risk management, the problem is that risk management is inherently...well...risky?

Risk management involves assigning probabilities to various outcomes and analyzing the cost of different types of failures, plus factoring the all-important "unforeseen" instances. It's not an easy task: if it were, insurance would be a zero profit business and people wouldn't have to go to college to work for Allstate.

Even expert physicists and mathematicians can fail in managing risk effectively

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