TOWARD CONSIDERING RISK ATTITUDES IN ENGINEERING ORGANIZATIONS USING UTILITY THEORY

Design projects within large engineering organizations involve numerous uncertainties that can lead to unacceptably high levels of risk. Practicing designers recognize the existence of risk and commonly are aware of events that raise risk levels. However, a disconnect exists between past project performance and current project execution that limits decision-making. This disconnect is primarily due to a lack of quantitative models that can be used for rational decision-making. Methods and tools used to make decisions in risk-informed design generally use an expected value approach. Research in the psychology domain has shown that decision-makers and stakeholders have domainspecific risk attitudes that often have variations between individuals and between companies. Risk methods used in engineering such as Failure Modes and Effects Analysis (FMEA), Fault

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