For nearly three decades, the Risk Management and Decision Processes Center at the Wharton School of the University of Pennsylvania has been at the forefront of basic and applied research to promote effective corporate and public policies for low-probability events with potentially catastrophic consequences. The Wharton Risk Center has focused on natural and technological hazards through the integration of risk assessment and risk perception with risk management strategies. After the attacks of September 11, 2001, research activities were extended to include national security issues (e.g., terrorism risk insurance, protection of critical infrastructure).

Building on the disciplines of economics, finance, insurance, marketing, psychology and decision sciences, the Center's research program is oriented around descriptive and prescriptive analyses. Descriptive research focuses on how individuals and organizations interact and make decisions regarding the management of risk under existing institutional arrangements. Prescriptive analyses propose ways that individuals and organizations, both private and governmental, can make better decisions regarding risk.

The Center supports and undertakes field and experimental studies of risk and uncertainty to better understand the linkage between descriptive and prescriptive approaches under various regulatory and market conditions.

In the past several years, the Center has significantly increased its size to now include 70 faculty, research fellows, students and visiting scholars from all over the world to undertake large-scale initiatives. Providing expertise and a neutral environment for discussion, the Center team is also concerned with training decision makers and promoting a dialogue among industry, government, interest groups and academics through its research and policy publications and through sponsored seminars, roundtables and forums. Our Newsletter, Project Snapshots and Issue Briefs provide updates of Center activities and publications.

 World Economic Forum's Global Risks, 2012.
The World Economic Forum’s Global Risks Report 2012, Seventh Edition has identified chronic fiscal imbalances and severe income disparity as the most prevalent risks over the next 10 years. These risks in tandem threaten global growth as they are drivers of nationalism, populism and protectionism at a time when the world remains vulnerable to systemic financial shocks, as well as possible food and water crises. These are the findings of a survey of 469 experts and industry leaders, indicating a shift of concern from environmental risks to socioeconomic risks compared to a year ago.  More information here. The Wharton Risk Center has been the academic partner of the World Economic Forum since 2005.

Who Benefits from Federal Flood Aid? The New York Times, October 1, 2011
by Howard Kunreuther
Op-ed by Howard Kunreuther on reforms to the National Flood Insurance Program.

People Get Ready, Issues in Science and Technology, September 2011
by Howard Kunreuther and Erwann Michel-Kerjan
Natural catastrophes are becoming more common and more expensive, but human and financial losses can be greatly reduced through incentives to purchase insurance and install protective measures.

Redesigning Flood Insurance, Science, July 22, 2011
by Erwann Michel-Kerjan and Howard Kunreuther
The U.S. Congress is discussing options for continuing the NFIP, which now operates under a 1-year extension, set to expire on September 30, 2011. The Federal Emergency Management Agency (FEMA), which is responsible for the NFIP, is reanalyzing the program. We argue that a new strategy for managing floods can increase personal responsibility, decrease risk, and lower government exposure. Improved scientific knowledge from a range of disciplines will be needed to price the proposed financial products appropriately. If successful in the United States, the approach could be explored by other countries.

"The Year in Risk"  Wharton Magazine, Spring 2011
Discussion with Howard Kunreuther and Erwann Michel-Kerjan on global risks in 2011, and how those risks are interconnected.

"Overcoming Myopia. Lessons from BP Oil Spill and Other Catastrophes" Milken Institute Review, 2010, 4th Quarter
by Howard Kunreuther and Erwann Michel-Kerjan

"Masters of Disaster" Wharton Magazine, Spring 2010
At Wharton's Risk Management and Decision Processes Center, researchers are investigating why humans do such a poor job planning for, and learning from, catastrophes.