Introduction

This introduction presents an overview of the key concepts covered in the subsequent chapters of this book. The book presents a wide-ranging discussion of approaches for assessing and managing extreme risks. It includes experts in economics, engineering, geography, law, political science, psychology, sociology, and science, in addition to risk analysis, since effective risk management benefits from an interdisciplinary perspective. Time has shown that effective risk management is inherently multidisciplinary. The book deals with identification and estimation of risks (both for risks that are reasonably well understand and for unanticipated 'black swans'), effective decision-making about risk (especially in complex environments), individual and societal perceptions of risk, and case studies illustrating how the methods and ideas can be applied in practice. Cox and Bier describe probabilistic risk analysis and related methods, with several examples. Finally, case studies are provided to illustrate how the ideas in this book can influence actual decision-making.