Human response to changes in risk


Gerald Wilde had a theory called risk homeostasis.  This theory hypothesizes that people have a level of acceptable risk.  When they perceive that there is less risk, they will take more risky actions to bring them to an acceptable level and when they perceive more risk, they will be more cautious.  Information security is very concerned with managing risk and reducing it to an organizationally acceptable level.  However, an organization is made up of many people and they may have a different level of acceptable risk than the organization does.  If the theory of risk homeostasis is applied to information security, individuals will take riskier actions when the organization implements controls to make them safer or when they perceive the environment to be safer.

This has far reaching ramifications for those in information security because the perceptions of risk by the individual may differ greatly from the actual risk.┬á Despite awareness of information security breaches in the news and the overwhelming statistics that a data breach is likely, people still have difficulty accepting that a breach could happen to them.┬á It all comes down to perceptions.┬á With WildeÔÇÖs theory, if a high risk is perceived then users will be more cautious and that is where the security minded organization wants to be.┬á So the question is, does the risk homeostasis theory hold water and if so, how do organizations manage perceptions in information security?


30 thoughts on “Human response to changes in risk

  1. The problem with risk homeostasis is that it is very hard to define and measure in individuals. The theory seems to explain the behavior of groups, and is a useful model when creating or modifying systems, as addressed in this article. However, new fMRI and neural network research is giving empirical support to the theory. It seems possible that the brain runs constant emulations of the outcomes of various future events and adjusts behavior accordingly. The jury is still out, but Dr. Wilde may be vindicated in the end.

  2. Eric:
    Read Montague argues that the brain runs simulations of future events very rapidly and constatly in Why Choose This Book? I just moved and all my books are still in boxes,so I can’t supply direct references, but Montague included a very coomplete reference list supporting his assertions.
    Vic Napier

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  6. A very interesting idea. Way to go Wilde. I just gave this onto a colleague who was doing research on risk management. I am going to read more on risk homeostasis.

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