Guest Post by Geary Sikich (first posted on CERM ® RISK INSIGHTS – reposted here with permission)
Recently I wrote an article titled “Can You Calculate the Probability of Uncertainty?” The article posited that the heavy dependence on mathematics to determine the probability of risk realization may actually create “false positives” regarding the basis for the determination of probability.
My point was that there is too much uncertainty, things that we just do not know, to be able to calculate the probability of uncertainty with any degree of confidence. I received several comments from readers telling me that I was confusing the issue and that determining the probability of risk is all about “uncertainty”.
I have to say that this gave me pause to think. And, my conclusion is that risk is all about the probability of identified certainties that carry an uncertain realization. [Read more…]