Seismic risk mitigation of building structures: The role of risk aversion

Abstract

ABSTRACT Risk mitigation decisions for civil infrastructure exposed to rare natural and manmade hazards are often impacted by risk aversion, a behavioral phenomenon in which the decision maker's perception and judgment of risk are systematically distorted, resulting in decisions that might be viewed as excessively conservative when compared to those from a traditional minimum expected cost analysis. Risk aversion is believed to be especially significant if the decision maker is confronted with a low-probability event with catastrophic consequences. Most consequence-based decision models, including those based on minimum expected lifecycle cost, have supported engineering decisions in many contexts but address the influence of risk perception on those decisions only to a limited degree. This study is aimed at exploring how decisions regarding structural safety are affected by the attitudes of the decision-maker toward risk using decision models, such as cumulative prospect theory, that allow risk-averse behaviors to be modeled. The nature of risk aversion is highlighted through two examples, the first involving seismic retrofit and the second related to aseismic design of a frame.