The analysis and assessment of risk is the formal process of increasing one’s understanding of the risk associated with an activity. The three primary questions in the process are
Risk analysis is a cross-cutting topic---it affects, for example, engineering, medicine, finance theory, public policy, and the military. But whatever the area the core ideas behind risk assessment and analysis are essentially always the same; a good solution depends upon the loss function, the probability of specific outcomes, and the costs of different actions. But there remain enormous challenges in tailoring the theory to the practice.
Different disciplines have met those challenges in different ways. A few have explicitly built upon the large body of statistical work subsumed in probabilistic risk assessment, but most have not. Many have developed alternative strategies that are robust to specific kinds of uncertainty, or which handle adversarial situations, or which deal with dynamically changing action spaces (i.e., situations in which the available actions change randomly over time, and relevant information accumulates; e.g., marriage opportunities for single people change over time, as do their criteria for a spouse). This kind of diverse innovation has broadened risk analysis beyond the traditional mathematical formulations.
The aim of the proposed encyclopedia is to draw together these varied intellectual threads in the hope that risk analysts in one area can gain from the experience and expertise of those in other disciplines. Corporate risk assessment, for example, may learn from military solutions; the work on monitoring for adverse health events might help to inform the early detection of unsafe automobiles. And portfolio management is very likely to be relevant to public policy investments. The statistical theory that underpins risk management will be enriched by bringing together the special features of particular areas.
The proposed encyclopedia will cover all the areas mentioned above, and many more. Key topics will include drug safety, investment theory, public policy applications, transportation safety, public perception of risk, epidemiological risk, national defense and security, critical infrastructure, and program management.
