Annual Report 2008.pdf - SAMSI

In the talk we will discuss some models arisen in recent and ongoing research in reliability,
especially in software reliability and degradation caused by cylinders in ships.
Elke Weber
Columbia University, Graduate School of Business
euw2@columbia.edu
Determinants of Risk Taking: The Important Role of Risk Perception
Risk taking is a behavior of significant societal importance and concern. Some individuals (e.g.,
female investors) are seen as taking not enough risk, while others (e.g., male adolescents) are
seen as taking too much risk. Economic models of risky choice attribute all individual and group
differences in risk taking to risk attitude, typically a parameter that influences the type and
degree of curvature of the decision maker’s utility function (e.g., in expected utility theory) or
that determines the risk—return tradeoff in finance models that price risky assets as a function of
their return (expected value) and
their risk (variance). In this talk, I present evidence that risk is not an immutable characteristic
of risky choice alternatives, but a psychological variable that is perceived in different, but
predictable ways by different individuals or groups. While risk taking is determined by both
perception of risk and attitude towards risk, the two constructs are confounded in models that
infer risk attitude from behavior without taking into consideration the decision maker’s
perception of the risk. When unconfounded, many apparent individual differences in risk
attitude can be attributed to differences in
risk perception.
Alyson Wilson
Los Alamos National Laboratory, Statistical Sciences Group
agw@lanl.gov
How DHS Currently Manages Risk
Homeland Security Presidential Directive / HSPD-10: Biodefense for the 21st Century provides
White House guidance on addressing the threat of bioterrorism. In particular, it states the
following: "Another critical element of our biodefense policy is the development of periodic
assessments of the evolving biological weapons threat. First, the United States requires a
continuous, formal process for conducting routine capabilities assessments to guide prioritization
of our on-going investments in biodefense-related
research, development, planning, and preparedness. These assessments will be tailored to meet
the requirements in each of these areas." In response to this requirement, the Department of
Homeland Security (DHS) published the first Biothreat Risk Assessment in 2006. This talk will
outline the risk analysis approach taken by DHS and highlight some of the strengths and
weaknesses of their methodology.