identification of optimal decisions. This framework is considered the theoretical basis for risk
based decision making and the following is concerned about the application of this for the
purpose of risk management in engineering.
Decisions and decision maker
A decision may be understood as a committed allocation of resources made by a decision
maker. The decision maker is an authority or person who has authority over the resources
being allocated and responsibility for the consequences of the decision to third parties. The
intention of the decision maker is to meet some objective, of a value to the decision maker
which at least is in balance with the resources allocated by the decision. The decision maker is
faced with the problem of choosing between a set of decision alternatives which may lead to
different consequences in terms of losses and benefits. The objective aimed for by the
decision making represents the preference of the decision maker in weighing the different
attributes which may be associated with the possible consequences of the decision alternatives.
It is thus clear that the formulation of the decision problem will depend very much on the
decision maker. Who are the stakeholders, the beneficiaries and the responsible parties? Each
possible decision maker will have different viewpoints in regard to preferences, attributes and
objectives. It is important to identify the decision maker since the selection and weighting of
attributes must be made on behalf of the decision maker.
Society as an entity is difficult to grasp in general and before discussing societal optimal
decision making any further it is necessary to try to limit the possible different interpretations.
According to Oxford (2006) “society” can be defined as: a particular community of people
living in a country or region, and having shared customs, laws, and organizations. This
definition is quite helpful as it indicates at least three important characteristics, namely a
geographical limitation, legal boundary conditions as well as organizational constraints. In
fact, however, despite this definition that points to society being defined at the level of
individual states and is surely in agreement with the most common understanding, it is in
several ways somewhat insufficient in the light of the rapidly ongoing globalization around
the world. Many decisions which in the past were considered as being issues of the individual
countries are now considered to be issues of general interests and significance for the world;
nuclear power exploitation and CO 2 emissions are examples hereof. In practice the
geographical limitation of a society to an individual country is thus not generally accepted.
For the same reason also societies smaller than states may be considered in which case issues
of common interest could relate to urban planning, waste management and water supply.
From the above it is apparent that there exist an infinite set of possible different ways of de-
fining societies. This underlines the necessity to define more clearly the notion of society
before this is useful in defining optimal societal decision making.
For the purpose of decision making it is necessary that certain attributes of the “decision
maker” are identified. These include the preferences of the decision maker, possible
exogenously given boundary conditions to which the decision maker must adhere as well as
limitations in regard to resources. First when these attributes have been defined fully it is
possible to proceed in the identification of optimal decisions. It is thus useful to consider a