Holzer, Boris and Millo, Yuval (2004) From risks to second-order dangers in financial markets: unintended consequences of risk management systems. CARR Discussion Papers, DP 29. Centre for Analysis of Risk and Regulation, London School of Economics and Political Science, London, UK. ISBN 0753017962
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Abstract
The notion of risk is central to modern society, both as a productive and as a troublesome concept. On the one hand, risk refers to a situation of opportunity. Only those who undertake a risk, bear the uncertainties and face the potential adverse consequences, may gain the rewards. On the other hand, risk refers to fundamental uncertainty: at the time of risk-taking one cannot know for sure whether the opportunity concerned will be realised; in the worst case, the costs incurred might be greater than any benefit. Risk therefore increases the scope for both rational and seemingly irrational decisions: without the willingness to undertake a risk some opportunities may never be realised; the costs of an unsuccessful risky decision, however, may be intolerably high and may thus disqualify the whole enterprise in hindsight
| Item Type: | Monograph (Discussion Paper) |
|---|---|
| Official URL: | http://www.lse.ac.uk/CARR |
| Additional Information: | © 2004 The Authors |
| Library of Congress subject classification: | H Social Sciences > HG Finance K Law > K Law (General) |
| Sets: | Research centres and groups > Centre for Analysis of Risk and Regulation (CARR) |
| Rights: | http://www.lse.ac.uk/library/rights/LSERO.htm |
| Identification Number: | DP 29 |
| URL: | http://eprints.lse.ac.uk/36101/ |
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