search query: @author Lo, A. W. / total: 5
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| Author: | Lo, A. W. |
| Title: | The three P's of total risk management |
| Journal: | Financial Analysts' Journal
1999 : JAN/FEB, VOL. 55:1, p. 13-26 |
| Index terms: | Risk management Decision making Prices Preferences Probability USA |
| Language: | eng |
| Abstract: | Current risk-management practices are based on probabilities of extreme dollar losses, but these measures capture only part of the story. Any complete risk-management system must address 2 other important factors - prices and preferences. Together with probabilities, these compose the 3 P's of Total Risk Management. In the article, it is described how the 3 P's interact to determine sensible risk profiles for corporations and for individuals - guidelines for how much risk to bear and how much to hedge. By synthesizing existing research in economics, psychology, and decision sciences and through ambitious research agenda to extend this synthesis into other disciplines, a complete and systematic approach to rational decision making in an uncertain world is within reach. |
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