What is the difference between risk and uncertainty in economics?

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I remember Pin Now said that uncertainty is that the likelihood of an event is not 100%, and the risk is that the value of the random event is subtracted from the expected deviation.

For example, give you two jobs, the first job is to take the certainty of 100 dollars wages, the second job is to take performance pay, you have 50% possibility to take 50 yuan, 50% of the possibility to take 150 dollars; Because the first job you have 100% of the possibility to take 100 dollars, there is only one implementation value, so the Two kinds of jobs are "uncertain".

The risk, then, is the deviation (the absolute value) of the values and events expected. For example, the second kind of salary, the expected income is 50%*50+50%150=100.

So we say that if you think the second job can only take 50 dollars (so you don't do it), then you are at risk of 100-50=50, and if you think the second job can take 150 dollars (so you do), you also face the risk of 150-100=50.

As a comparison, give you a job, you have a 90% chance to take 150 dollars, there is a 10% chance to take 50 dollars. Then the expected benefit of the job is 140 dollars. So if you think the second job can only take 50 bucks (so you don't do it), then you're at risk of 140-50=90, and if you think a second job can take 150 bucks (so you do), you're also at risk of 150-140=10.

Comparing these two jobs, the " uncertainty" of the 150 implementation becomes smaller, so its "risk" becomes smaller. Because of the "uncertainty" of the 50 implementation, the " risk" becomes larger.

The average risk of measuring a random event itself can be expected with a deviation.

Therefore, for the first job, the risk is 0

For a second job, the average risk is 50%*50+50%*50=50

For a third job, the average risk is 90%*10+10%*90=18

Risk and uncertainty, many students have said, is based on the distribution of unknown. I certainly know the answer, but I'm not happy with it because we don't get anything interesting from it.

Pin Now Teacher's statement is very interesting. (I think these distinctions are the definition of a dispute, the word of contention, so it's important to be content) because, literally, uncertainty seems to imply that a 1-0 certainty event is more uncertain than a 50-50 uncertainty event, but it is also 50-50 uncertainty. , the risk is the same? As you can imagine, if you have a 50% chance of dying, and you have a 50% chance of losing a piece of money, the risk is not the same. The reason for this difference is that the return of the event, or the deviation from the central trend, the same probability deviation, deviating from 100 is obviously more risky than deviating from 10, that is, the variance measures the size of the risk. I think this is very interesting, although the risk of the theorem, I do not know where ping teacher saw from.

Add a little more and don't tell me that distribution is not known. Yes, you divide the "uncertainty" and the "risk" so that we understand the two kinds of different things, good. But is it that economists are so strict in discussing issues? Open any book with "Not sure", the inside all research do not know distribution? For example, what is the expected utility? Do not know what the distribution of the expected utility?

Don't assume that distribution is a scientific, objective thing. Even if you do not know the distribution, the human belief, the subjective probability of human beings still exist, people can still give a distribution for any situation, even if he himself does not know the situation, he will also give an approximate 0 distribution. For example, who knows the probability of being killed by a car? We do not know, but we go out and consider this probability, we know it is not very big, not from the battlefield of the crossfire to die the probability of death, so we dare to go out, but it is not very small, did not suddenly fall off a meteorite to kill you probability, so we still have to be careful. No one knows the probability of being hit by a car, not knowing the probability distribution of all events after going out, but does not prevent us from assigning a probability to the subjective. For example, we do not know before the Ebola virus, we will not worry about going out infected with the Ebola virus, will not give it zero probability chant.

What is the difference between risk and uncertainty in economics?