![]() ![]() Thus, a rational person should opt for the behaviour option (or set of alternatives) that is perceived as most likely to deliver the greatest net benefit. The first two factors increase the target level of risk, whereas the last two diminish it. The expected costs of risky behaviour options. The expected benefits of comparatively cautious behaviour options The expected costs of comparatively cautious behaviour options The expected benefits of risky (comparatively dangerous) behaviour options ![]() ![]() Four utility factors determine the target level of risk: This optimal, or target, level of risk is that which maximises the overall benefit (probabilityĆamount). The challenge, therefore, is to optimise rather than eliminate risk. While some actions entail more danger (probabilityĆmagnitude of loss) than others, there is no behaviour without some risk.
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