Effects of Risk Attitude and Controllability Assumption on Risk Ratings: Observational Study on International Construction Project Risk Assessment

Impact of Risk Attitude on Risk, Opportunity, and Performance Assessment of Construction Projects

“…The assessment of project uncertainties and expected performance is subjective in that not all uncertainties and performance criteria can be quantified (Dikmen et al, 2018). Further, different stakeholders may have different preferences (Ruan et al, 2015).…”

“…Ignoring the influence of risk attitude on project uncertainty and expected performance assessment can lead to overlooking critical risks and opportunities, and overestimating noncritical risks and opportunities, thereby selecting suboptimal strategies for managing project uncertainty. Related to this, Dikmen et al (2018) conducted a survey in order to investigate the impact of project managers’ risk attitude on risk assessment and controllability assumptions with respect to controlling different project risks. They found evidence of a moderate association between risk attitude and risk ratings assigned by project managers involved in international construction projects in Turkey.…”

“…They found evidence of a moderate association between risk attitude and risk ratings assigned by project managers involved in international construction projects in Turkey. The findings reported by Dikmen et al (2018) provide useful insights into understanding the limitations of existing risk management tools and techniques; however, it is equally important to establish how risk preferences could influence the assessment of project opportunity and expected project performance. Further, the impact of risk attitude on the assessment of uncertainty associated with multiple dimensions of project complexity and project performance could help in identifying critical dimensions and establishing better forecasts.…”

“…This may help in establishing the effects of risk attitude on various factors in project uncertainty assessment and identifying critical factors. Dikmen et al (2018) investigated the impact of project managers’ risk attitude and their controllability (of project risk) assumptions on the risk assessment of international construction projects. They found a moderate correlation between risk attitude and risk ratings, and risk attitude and controllability assumptions.…”

Bayesian Belief Network-Based Project Complexity Measurement Considering Causal Relationships

“…Bayesian Belief Network (BBN), a graphical framework for modeling uncertainty, incorporates a unique feature for capturing the interaction between elements (Wu et al, 2015;Zhang et al, 2014). BBN has been applied in various domains, including root cause analysis (Diallo et al, 2018;Wee et al, 2015), risk management (Dikmen et al, 2018;Zhang et al, 2014), and decision making (Pan et al, 2019;. The BBN has several advantages: (1) It can describe the probability relationship (causality) between variables combining the Bayesian probability theory with the graph theory; and (2) It can compute the probabilities with given evidence under different scenarios (Zhang et al, 2016).…”