TY - GEN

T1 - Decision-making for civil infrastructure exposed to low-probability, high-consequence hazards

T2 - 11th International Conference on Applications of Statistics and Probability in Civil Engineering, ICASP

AU - Cha, E. J.

AU - Ellingwood, B. R.

PY - 2011

Y1 - 2011

N2 - The assessment of risk to civil infrastructure has two components: probability of a potentially damaging event and consequence of damage, measured in terms of financial or human losses. Deci-sion models that have been developed and implemented during the past three decades take into account the probabilistic aspect rationally, but address decision-maker attitudes toward risk only to a limited degree. The application of such models to decisions involving low-probability, high-consequence events affecting civil infrastructure requires a fundamental understanding of risk acceptance attitudes and how they affect individual and group choices. The phenomenon of risk aversion may be a significant factor in decisions for civil infrastructure exposed to low-probability events with high consequences, such as earthquakes, hurricanes or floods. This paper utilizes cumulative prospect theory to investigate characteristics of risk-aversion that can be inferred from risk pricing techniques in the insurance industry and explores the role of risk-aversion in assurance of structural safety.

AB - The assessment of risk to civil infrastructure has two components: probability of a potentially damaging event and consequence of damage, measured in terms of financial or human losses. Deci-sion models that have been developed and implemented during the past three decades take into account the probabilistic aspect rationally, but address decision-maker attitudes toward risk only to a limited degree. The application of such models to decisions involving low-probability, high-consequence events affecting civil infrastructure requires a fundamental understanding of risk acceptance attitudes and how they affect individual and group choices. The phenomenon of risk aversion may be a significant factor in decisions for civil infrastructure exposed to low-probability events with high consequences, such as earthquakes, hurricanes or floods. This paper utilizes cumulative prospect theory to investigate characteristics of risk-aversion that can be inferred from risk pricing techniques in the insurance industry and explores the role of risk-aversion in assurance of structural safety.

UR - http://www.scopus.com/inward/record.url?scp=84856726760&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84856726760&partnerID=8YFLogxK

M3 - Conference contribution

AN - SCOPUS:84856726760

SN - 9780415669863

T3 - Applications of Statistics and Probability in Civil Engineering -Proceedings of the 11th International Conference on Applications of Statistics and Probability in Civil Engineering

SP - 840

EP - 847

BT - Applications of Statistics and Probability in Civil Engineering -Proceedings of the 11th International Conference on Applications of Statistics and Probability in Civil Engineering

Y2 - 1 August 2011 through 4 August 2011

ER -