Recently, Professor Meng Qingchun, Associate Professor Bao Chunbing, and PhD student Cai Meng from the School of Management published the latest research “Risk aggregation considering probabilistic and consequential interactions: A general formulation with computational cost handling” online in the international journal Risk Analysis. It is the official journal of the Society for Risk Analysis (SRA) and the top journal in the field of risk management, which belongs to the SSCI District 1, ABS Level 4, and FMS Class A. Associate Professor Bao is the first author, Professor Meng is the corresponding author, PhD student Cai Meng is the co-author, and Shandong University is the first and only corresponding author affiliation.
In practice, the risk assessment usually contains multiple risks. Obtaining the integrated risk of all risks and using the overall information risk management is crucial to improve the efficiency of risk management and reduce its cost. However, complex correlations between risk events make accurately integrating risks challenging. Several studies have been conducted to discuss risk integration formulas with embedded correlations. Due to the complexity of the integration principles or the specificity of the risk integration perspective, the existing integration methods have limitations in application, especially in subjective risk assessment environments. By balancing the universality and accuracy of risk integration formulas, the research provides a systematic discussion of risk integration considering correlations.
To make the risk integration results more accurate and the integration process more convenient, the research made the following four aspects: (1) Identified risk correlations more comprehensively, and gave a more rigorous definition, measure, and visual representation of correlations. (2) Proposed a risk integration method that can simultaneously embed different types of risk correlations and can be applied in both subjective and objective risk assessment environments. (3) Discussed systematically the additivity of integrated risks and gave additivity theorems at the level of individual risk events and risk event sets. (4) Proposed an approximate measure of integrated risks that can substantially reduce the computational complexity under the guarantee of accuracy to further improve the applicability of the paper’s approach in assessment environments where subjective or large-scale risk events exist. The research further enriches the basic theory of risk integration, and the proposed risk integration method helps to improve the effectiveness of risk decision-making in practice.
The research is funded by the Key Program (72134004) and the General Program (71901132 and 72271144) of the National Natural Science Foundation of China.
Bao Chunbing, Associate Professor and Doctoral Supervisor of the School, hosts one sub-project of the Key Program, one General Program, one Youth Program, and one China Postdoctoral Special Funding Program of the NSFC. He has published more than 20 papers in the top journals of risk management, such as Risk Analysis, Nature’s sub-journal Scientific Reports, IEEE Transactions on Fuzzy Systems, Journal of Risk Research, Journal of Management Science and Engineering (English version), etc., and also published two academic monographs in Springer Nature. He serves as the director of the Risk Management Branch, the member of the Youth Working Committee, and the Deputy Secretary General of the Network Science Branch of the Chinese Society of Optimization, Overall Planning, and Economic Mathematics.
Meng Qingchun, Professor, Doctoral Supervisor, and Secretary of the Party Committee of the School, is an Outstanding Young and Middle-aged Scholar of Shandong University, and the director of the Artificial Intelligence Management and Decision-making Simulation Laboratory of Shandong Higher Education Institutions. In recent years, he has presided over one Key Program and two General Programs, and executed one Key Program of the NSFC; published more than 60 papers and four monographs and textbooks; won the second prize of the National Teaching Achievement, the first prize of Shandong Excellent Achievements in Social Sciences Award, and five other provincial awards. He is also the deputy secretary general of the Chinese Society of Optimization, Overall Planning and Economic Mathematics, the acting chairman of the Network Science Branch of the Chinese Society, and the editorial board member of the Chinese Journal of Management Science, etc.
Link: http://doi.org/10.1111/risa.14253
