Uncertainty and Risk: Multidisciplinary Perspectives.
In recent economic discourse, risk and uncertainty have received increased attention, primarily as a result of the recent global financial turmoil. Not only is the risk of certain financial derivatives assessed, but also that of the whole economy, of firms and so on. Because it is considered as something negative, we try to assess and manage the different kinds of risks: for example, by insuring against them or by distributing it. In truth, we are far from being successful. Although our aim was to reduce risks, we increased it instead by presenting new, complex and impenetrable financial products in order to earn even more profit (e.g., the subprime mortgage crisis).
So, our risk assessment and risk management failed. We used advanced techniques and also financial regulation but today it is clear that deep changes are needed in the financial system to defend ourselves against excessive risk taking. This work has begun: ideas for new regulation, development of technical tools, changes to the incentives that lead to the crisis, and setting limits on risk taking have started.
But is it really what should be done? Is our point of view considering risk and uncertainty appropriate? Do we really see the risks and uncertainties we should assess and manage? Do we really have to manage them? Are these risks all negative? Are our tools appropriate? I do not think these questions can be answered. But perhaps some ideas can be stolen from other disciplines.
Uncertainty and Risk: Multidisciplinary Perspectives can help us in this theft. Everyone knows that uncertainty related to terrorism, nuclear technology, climate change, and some other topics has to be managed, but from this book the reader will also meet other disciplines where uncertainty has importance. If we see what others think of risk and uncertainty and how they assess and manage it (if they manage it at all), we can receive some ideas, we can work together, and we can perhaps earn a better outcome. Of course it is not an easy task. We have different thinking, logic, and approaches. We work with absolutely different topics and tools. But perhaps integration of the different disciplines' knowledge can be useful. Uncertainty and Risk: Multidisciplinary Perspectives is the first step in this job.
The editors prepared a symposium where academics, professionals groups, and practitioners had the opportunity to present their discipline from the risk's and uncertainty's point of view. Twenty discipline-, practice-, and problem-based perspectives were presented and discussed. Among the disciplines a broad spectrum of sciences are represented such as arts, human sciences, and social sciences. This symposium was the genesis of the book: it was the first step in its production by bringing together the participants from different disciplines.
Uncertainty and Risk: Multidisciplinary Perspectives has four main parts. The first part is an introductory part with three chapters presenting uncertainty and its importance and emphasizing that this topic was neglected until recent times. An important conclusion of this part is that uncertainty is present at each decision, and its main source is lack of information, but it can also have such parts of which we would not even think. These sections also identify the lack of a common literature related to uncertainty across the different disciplines. They also present the basic management methods of uncertainty and propose the development of a new science called integration and implementation science (I2S), which could bring together what is known and what is not known in different sciences about an issue and which could make decision making and action more effective. Without applying this science, this task could not be fulfilled as no existing discipline would be able to do that. So, I2S could integrate the knowledge of different disciplines using five different strategies, such as dialogue-based, model-based, product-based, vision-based, and common-metric-based strategies.
The second part, consisting of 20 chapters, presents the perspectives of the different disciplines. Among the disciplines the following topics can be found: investigation of infectious disease outbreaks, religion, physics, statistics, philosophy, music, visual art, history, uncertain futures, social uncertainties, drug dependency, politics, public health, economics, decision making, emergency management, environment, terrorism, and law.
The third part, consisting of three chapters (and the main contribution of the book), tries to unify the different perspectives. The first chapter presents the nature of uncertainty: the differences in the emphasis within and across the disciplines, the discussions about the irreducibility of risk and uncertainty, and the several ways of structuring uncertainty and a deeper investigation of three topics: disease outbreaks, illicit drug use, and response to environmental problems. The second chapter introduces the diverse metaphors and definitions to uncertainty; although most of them are negative, we can also find positive ones. It also introduces the motives of reducing uncertainty and its moral implications. The third chapter deals with coping and managing uncertainty or even benefiting from it. We can read how uncertainty can be treated (it should be denied, banished, reduced, accepted, tolerated, surrendered, controlled, harnessed, or exploited), understood, and represented, and how we can respond to it, what kind of strategies we can use. But it is important to understand that treatment of uncertainty is not the interest of each participant; for example, terrorists' main tool is creating fear and uncertainty.
The fourth part deals with the conclusions for risk assessment and management through two chapters. The first chapter is about deep uncertainty: how to cope with it in environmental challenges and decision making. As possible resolutions it offers delay to gather information, targeting critical uncertainties by deeper analysis, enlarging the knowledge base through lateral thinking, invoking the precautionary principle, using an adaptive management approach, or building a resilient society. The second chapter deals with the relation of society and uncertainty: cognitive risk perception, social amplification (interaction with psychological, social, or cultural processes), and implications for policy.
So, the main contribution of the book is in my opinion the collection and unification of different approaches--or at least the beginning of this work. This work is not at all easy: as can be found in the second part of the book, huge differences can be found in the approaches, the styles, the tools, and the effects of uncertainty among the disciplinary perspectives. For example, in music, according to the author of the relevant chapter, uncertainty has a positive effect--for me it was already surprising that it has any effect at all. Sometimes it is the base of a discipline (religion) while for others it is something negative that should be avoided. Uncertainty is sometime an opportunity and a challenge in the same context (politics). Sometimes uncertainty is tried to be measured (as in physics) but in other cases not (as in arts). But in my opinion this work is useful and necessary. Of course due to these difficulties the book could not achieve its goal and cannot be considered as a finished work but as the first step of a longer project--as expressed in the book.
Considering the different chapters the level is very vacillating. We can read some very interesting, practice-based, and well-written chapters such as the one related to SARS but we can also find boring and philosophical chapters. It would have been perhaps useful to give a uniform guide to the authors as a frame or a base of their work to help the comparability of the disciplines. From the other side, the fact that authors come from different sciences and we can find not only academics but also practitioners, is an important value of the book.
Of course I cannot assess the content and profoundness of each chapter, but I think that the 20 chapters could be a bit deeper; for example, the chapter about economics is only seven pages long and it is only about the expected utility theory and its critiques. Insurance does not have an important role in the book either. Mathematics could also have received more attention.
From the other side I sometimes felt that 20 disciplines are too many as a first step. Perhaps some stronger connected disciplines could have been chosen. This way a deeper introduction could have been presented for each topic.
An important advantage of the book is that we can gain inspection into disciplines that were unknown to us and tries to bring it together with our discipline. The different chapters are not difficult to understand; no previous knowledge is necessary in most cases.
So, Uncertainty and Risk: Multidisciplinary Perspectives is a useful work that can be the base of a new science and a lot of further research. It offers a valuable analysis of uncertainty in 20 disciplines and tries to unify common implications and tools. The reader will receive new viewpoints and perspectives after reading the book. I hope that in the future a deeper work will be done in the different disciplines, including the topic of insurance and developing the unification. Thinking multidisciplinary is not easy, but profitable. I am looking forward to the following steps of the work.
Reviewer: Gabor Regos, Corvinus University of Budapest, Hungary; email@example.com
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|Publication:||Journal of Risk and Insurance|
|Article Type:||Book review|
|Date:||Jun 1, 2012|
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