Behavioral Risk Management: Managing the Psychology That Drives Decisions and Influences Operational Risk

Hersh Shefrin

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Behavioral Risk Management: Managing the Psychology That Drives Decisions and Influences Operational Risk

Behavioral Risk Management Managing the Psychology That Drives Decisions and Influences Operational Risk The psychological dimension of managing risk is of crucial importance and its study has led to the identification of specific do s and don ts Those with an understanding of the psychology underlying

  • Title: Behavioral Risk Management: Managing the Psychology That Drives Decisions and Influences Operational Risk
  • Author: Hersh Shefrin
  • ISBN: 9781137445605
  • Page: 383
  • Format: Hardcover
  • The psychological dimension of managing risk is of crucial importance, and its study has led to the identification of specific do s and don ts Those with an understanding of the psychology underlying risk and the skills to recognize its manifestation in practice, have the opportunity to develop frameworks that embody the do s and don ts, thereby producing sound judgmentsThe psychological dimension of managing risk is of crucial importance, and its study has led to the identification of specific do s and don ts Those with an understanding of the psychology underlying risk and the skills to recognize its manifestation in practice, have the opportunity to develop frameworks that embody the do s and don ts, thereby producing sound judgments and good decisions Those lacking the understanding and the skills are destined to be hit and miss in their approach to risk management, doing the don ts and not doing the do s Virtually every major risk management catastrophe in the last fifteen years has psychological pitfalls at its root The list of catastrophes includes the 2008 bankruptcy of Lehman Brothers and subsequent global financial crisis, the 2010 explosion at BP s Macondo well in the Gulf of Mexico and the 2011 nuclear meltdown at the Fukushima Daiichi power plant A critical lesson from psychological studies for those involved in risk management is that people s judgments and decisions about risk vary with type of circumstance In Behavioral Risk Management readers will learn that there are specific actions that organizations can undertake to incorporate understanding, recognition, and behavioral interventions into the practice of risk management There are many examples throughout the book that illustrate doing the don ts The chapters in the first part of the book introduce the main ideas, and the chapters in the latter part provide insight into how to apply those ideas to the practical world in which risk managers operate.

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      Published :2019-01-19T02:16:25+00:00

    One thought on “Behavioral Risk Management: Managing the Psychology That Drives Decisions and Influences Operational Risk

    1. Haur Bin on said:

      Risk management involves building risk management structure / processes and addressing psychological bias when it comes to risk management decisions. Former is something tangible while latter is hard to measure - building a culture of managing risk is not easy. Decisions will always be swayed by one of 3 key emotions (security, potential, aspiration) faced by the decision maker at that point. Same information can be perceived differently by different people as they are processed through differen [...]

    2. Trevor on said:

      I was sent a free copy of this book and was happy to read it. I have long tried to combine my interests in behavior and managing risk to my profession, so this book was of interest to me; the author did a great job crystallizing the thoughts I had but could never properly articulate. Good book.

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