I recently received a request from ASCE for my support in developing the ASCE CEC Early Career cross-discipline certification. This request prompted me to review the CEBOK, which includes a section on Risk and Uncertainty. It further prompted me to examine the distinction between risk and uncertainty. I found this reference to Frank Wright
https://news.mit.edu/2010/explained-knightian-0602
Frank Knight was an idiosyncratic economist who formalized a distinction between risk and uncertainty in his 1921 book, Risk, Uncertainty, and Profit. As Knight saw it, an ever-changing world brings new opportunities for businesses to make profits, but also means we have imperfect knowledge of future events. Therefore, according to Knight, risk applies to situations where we do not know the outcome of a given situation, but can accurately measure the odds. Uncertainty, on the other hand, applies to situations where we cannot know all the information we need in order to set accurate odds in the first place.
Searching for Frank Knight and risk and uncertainty will yield many more references.
How do you view the difference between risk and uncertainty? Sharpening this distinction would help everyone.
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Mitch Winkler P.E.(inactive), M.ASCE
Houston, TX
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