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Risk Dynamics─An Analysis for the Risk of Change

  • Author(s): Huang, Tailin
  • Advisor(s): Bea, Robert G.
  • Kastenberg, William E.
  • et al.
Abstract

The concept of risk has evolved over the centuries of human history. People care about risk because much of our property and human lives are constantly at stake in the face of unforeseeable future. Unlike the fixed, known past, the future is always uncertain to us. In fact, such uncertainty is where risk arises. Thus, people assess risk by identifying sources of uncertainty and manage risk by trying to reduce those uncertainties. Indeed, existing risk analysis may be reduced to an endless anticipation of hazardous events, followed by a quantification of how likely those events are to happen and what their consequences are. Those approaches were originally developed for relatively well structured mechanical problems. However, our society inexorably marches towards greater complexity. On top of such natural progression, the advance of information and communication technology has made the rate of society's development faster than ever. Everything in society changes over time and the complexity of change brings us the uncertain future that perplexes our decision-making processes. Our current conceptual framework for risk analysis is now facing serious challenges due to the rapid pace of change in today's societies. How can we analyze risk when systems are constantly changing? To answer this question, this research will reexamine the concept of risk and investigate the uncertainty and complexity of change, to understand the very nature of risk in the ever-changing systems. In Newton's laws of motion and the ways of traditional Chinese medicine, we have found a new perspective of risk and a new way to analyze it.

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