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On the rationality of using risk acceptance criteria based on the expected utility theory

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  • Eirik Bjorheim Abrahamsen

Abstract

Risk acceptance criteria, as upper limits of acceptable risk, are often used to control accident risk. In the literature, there is a discussion about the suitability of using such criteria. The purpose of this paper is to contribute to this discussion by questioning the rationale of using risk acceptance criteria in accordance with the ruling paradigm for decision-making under uncertainty – the expected utility theory. Attention is given to the rationality of using risk acceptance criteria from both a firm's and a societal point of view.

Suggested Citation

  • Eirik Bjorheim Abrahamsen, 2011. "On the rationality of using risk acceptance criteria based on the expected utility theory," International Journal of Business Continuity and Risk Management, Inderscience Enterprises Ltd, vol. 2(1), pages 70-78.
    • Handle: RePEc:ids:ijbcrm:v:2:y:2011:i:1:p:70-78
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    Cited by:

    1. Aven, Terje & Hiriart, Yolande, 2011. "The use of a basic safety investment model in a practical risk management context," Reliability Engineering and System Safety, Elsevier, vol. 96(11), pages 1421-1425.
    2. Abrahamsen, Eirik Bjorheim & Aven, Terje, 2012. "Why risk acceptance criteria need to be defined by the authorities and not the industry?," Reliability Engineering and System Safety, Elsevier, vol. 105(C), pages 47-50.

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