Difference Between Risk And Uncertainty
In 1921, Frank Knight summarized the difference between risk and uncertainty thus: "… Uncertainty must be taken in a sense radically distinct from the familiar notion of Risk, from which it has never been properly separated.
The essential fact is that "risk" means in some cases a quantity susceptible of measurement, while at other times it is something distinctly not of this character; and there are far-reaching and crucial differences in the bearings of the phenomena depending on which of the two is really present and operating. It will appear that a measurable uncertainty, or "risk" proper, as we shall use the term, is so far different from an un-measurable one that it is not in effect an uncertainty at all."
In 1921, Frank Knight summarized the difference between risk and uncertainty thus: "… Uncertainty must be taken in a sense radically distinct from the familiar notion of Risk, from which it has never been properly separated.
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The essential fact is that "risk" means in some cases a quantity susceptible of measurement, while at other times it is something distinctly not of this character; and there are far-reaching and crucial differences in the bearings of the phenomena depending on which of the two is really present and operating. It will appear that a measurable uncertainty, or "risk" proper, as we shall use the term, is so far different from an un-measurable one that it is not in effect an uncertainty at all."
Insurance Law And Practice - ICSI
Difference Between Risk And Uncertainty
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