Keywords: risk acceptance criteria, expected utility theory, acceptable risks, risk control, accident risk, decision-making, uncertainty, societal aspects, business continuity, risk management
On the rationality of using risk acceptance criteria based on the expected utility theory
Risk acceptance criteria, as upper limits of acceptable risk, are often used to control accident risk. In the literature, there is a discussion about the suitability of using such criteria. The purpose of this paper is to contribute to this discussion by questioning the rationale of using risk acceptance criteria in accordance with the ruling paradigm for decision-making under uncertainty – the expected utility theory. Attention is given to the rationality of using risk acceptance criteria from both a firm's and a societal point of view.