Two Types of Risk : Recoverable Damage and Unrecoverable Damage(<Special Articles II>Risk and Safety in Social Economic Systems)

Abstract

When we consider risk control, we should distinguish between recoverable damage and unrecoverable damage. In the case of risk control managing recoverable damage, we use the learning control with the performance criterion which consists in balance between the statistically average loss and the control costs. In the case of risk control managing unrecoverable damage, we should use the minimax rule-the rule adopting the means which can minimize the forecasted maximum loss. From these analyses, we are able to get better viewpoints on the risk control systems.