What are we missing in risk management?

Felix Kloman

Journal of Risk Management in Financial Institutions, 2008, vol. 1, issue 4, 354-359

Abstract: This paper addresses five possible ‘blind spots’ in the current practice of risk management. These are: (1) the ‘divinity of the gods’ — the inability to criticise senior management; (2) the ‘rush of herds’ — the inability to project and predict mass delusions and hysteria; (3) ‘black swans’ — the failure of models to anticipate outlier events; (4) ‘the error of success’ — the human inclination to think that current success will repeat itself; and (5) ‘academic pomposity’ — the regression towards intellectual obscurity among academic writers.

Keywords: blind spots; executive pay; crowd behaviour; extreme events; behavioural economics; academic jargon (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:aza:rmfi00:y:2008:v:1:i:4:p:354-359

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