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Introduction

Every day, in decisions ranging from crossing the

street to considering whether a hamburger is safe to eat,

every one of us must face and manage a wide variety of

risks.  Every such decision involves balancing the uncer-

tain rewards of actions against the potential losses.

Figure 1 uses the risk "thermostat" as a model of this

balancing act.  The model postulates that

· everyone has a propensity to take risks;

· this propensity varies from one individual to

another;

· this propensity is influenced by the potential

rewards of risk taking;

· perceptions of risk are influenced by experience of

accident losses--one's own and others';

· individual risk-taking decisions represent a balanc-

ing act in which perceptions of risk are weighed

against propensity to take risks; and

· accident losses are, by definition, a consequence

of taking risks; the more risks an individual takes,

Figure 1

The Risk "Thermostat"