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The Wharton Risk Management and Decision Processes Center is a nexus of people and projects devoted to furthering the practical understanding of how to manage situations of risk involving health, safety, and the environment in both the private and public sectors of our society. For over twenty-five years, the Center has been at the forefront of research into the management of low-probability/high-consequence events. In addition to working on programs of basic and applied research, Risk Center faculty serve on national and international advisory committees, with partnerships in government, academia, industry, and NGOs.
Building on the disciplines of economics, decision sciences, finance, insurance, and marketing, the Center's research program is focused on descriptive research and prescriptive analyses. Descriptive research focuses on how individuals and organizations interact and make decisions regarding the management of risk. 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 link between descriptive and prescriptive approaches to decision making in coping with technological and natural hazards under various regulatory, environmental, and market conditions. Center research investigates the effectiveness of strategies such as incentive systems, insurance, regulation, and the communication of risk information.
The Center actively engages multiple viewpoints, including the expertise of top-level representatives from the worlds of insurance, industry, academia, environmental concern, law, and government.
This site provides information on ongoing research, current and past publications, and upcoming events.
Risk Regulation Seminars:
4:30 – 6:00 pm
Room G50, Jon M. Huntsman Hall
3730 Walnut Street,
Wharton School, University of Pennsylvania
Seminars are free and open to the public.
Fall 2009 series announcement coming soon.
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New publications:
 At War with the Weather: Managing Large-Scale Risks in a New Era of Catastrophes, MIT Press 2009.
In 2005, three major hurricanes—Katrina, Rita, and Wilma—made landfall along
the U.S. Gulf Coast within an eight-week period. The damage caused by these storms led
to insurance reimbursements and federal disaster relief of more than $180 billion—a
record sum. Today we are more vulnerable to catastrophic losses because of the increasing
concentration of population and activities in high-risk coastal regions of the
country. In At War with the Weather, Howard Kunreuther and Erwann Michel-Kerjan and their
colleagues deliver a groundbreaking analysis of how we currently mitigate, insure
against, and finance recovery from natural disasters in the United States. The two-year study analyzes data on over 10 million homeowners' policies and the operations of private and state-run insurance companies in the hurricane-prone states of Florida, New York, South Carolina and Texas, interpreted in the context of existing state insurance regulatory systems and the structure of the property insurance market in the United States.
Palm Beach Post, May 30, 2009
"If a major hurricane strikes Florida this season, we all pay"
"This is not just another hurricane season," said Erwann Michel-Kerjan, a University of Pennsylvania professor and author who specializes in catastrophic risk. The start of the season finds Florida's insurance market in a "fragile" state, an analysis by Fitch Ratings concludes. The largest remaining private insurer, State Farm, has threatened to leave within two years.
The Irrational Economist
 On December 4 and 5, 2008, over 100 leading scholars in the fields of decision sciences, economics of information, political economy, catastrophic risk management and insurance gathered at the Wharton School.
"Katrina, 9/11, Global Recession: Moving Beyond Old Thinking about New Risks" Knowledge@Wharton, February 18, 2009.
Contributions from conference panelists will be compiled in a book, The Irrational Economist: Making Decisions in a Dangerous World to be published by Public Affairs Press (2010).
Risk Management Review, Spring 2009.
The newsletter of the Wharton Risk Management Center.
World Economic Forum's Global Risks Report, 2009. Global Risks 2009 identifies deteriorating fiscal positions, a hard landing in China, a collapse in asset prices, gaps in global governance and issues relating to natural resources and climate as the pivotal risks facing the world this year. The Wharton Risk Center has been the academic partner of the World Economic Forum since 2005. Press Release.
"Has the Response to Swine Flu Been Too Feverish?" Knowledge@Wharton, May 13, 2009
"Re-thinking Risk Management: Why the Mindset Matters More Than the Model" Knowledge@Wharton, April 15, 2009
"The Need for Long-Term Flood Insurance and Mitigation Loans." Natural Hazards Observer, March 2009, pp.8-10
Invited comment by Howard Kunreuther and Erwann Michel-Kerjan. Full issue here.
"Katrina, 9/11, Global Recession: Moving Beyond Old Thinking about New Risks"
Panelists from the December 2008 risk management conference at Wharton, "The Irrational Economist" present
their views on how to prepare for natural and man-made disasters that have wider effects as the world grows more interconnected. Knowledge@Wharton, February 18, 2009 “Anticipating risks, averting the worst." The Philadelphia Inquirer, December 16, 2008
Howard Kunreuther and Michael Useem
With Congress balking at a bailout, General Motors soon could be driven into the dustbin of history. How
did an icon of American business reach such a disastrous state?
For an answer, it's instructive to consider natural disasters - which, like corporate calamities, have been
particularly devastating to the country in recent years.
Online in The Philadelphia Inquirer
Clearing the Air: How Companies Operate in a Climate-Conscious Era.
Paul Kleindorfer, Howard Kunreuther and Eric Orts discuss how major companies are addressing their impact climate change, and the potential of climate-related regulations to reduce carbon emissions. Knowledge@Wharton, June 11, 2008.
Markets Without Magic - How Competition Might Save Medicare
By Mark V. Pauly, AEI Press, April 2008
The tax burden that Medicare creates is on track to more than triple within the next three decades. We must find a way to slow the rate of growth in taxpayer-financed funding for Medicare in order to make the program financially sustainable. Mark V. Pauly argues that unavoidable limits on Medicare financing can best be imposed through market-based choices rather than government direction.
The Wharton Risk Management and Decision Processes Center
500 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104
(215) 898-5688
For more information on the Center or this website, please contact our webmaster.
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