Principle of Calculated Risk

Fleet Admiral Chester W. Nimitz portrait.jpgI wonder what is the originality, from a purely conceptual standpoint, of Nimitz' "Principle of Calculated Risk" (PCR). Aside from its indiscutible tactical value proven in WWII, this principle seems a commonsensical variation of a priciple that is ancient: Here's some possible ancestors:

  • Prov. 25:8: ... utter not hastily in a quarrel: lest afterward thou mayst not be able to make amends.
  • Lk. 14:31: "Or what king, going to make war against another king, sitteth not down first, and consulteth whether he be able with ten thousand to meet him that cometh against him with twenty thousand?"
  • "reasonable chance condition" [Cajetan says] that for a war to be just, the Prince ought to know he has enough power to be morally certain of victory: first because otherwise he exposes himself to the manifest danger of imposing on his state greater harm than is fair. Quaestio de bello (from Suarez in Franklin).
  • Thompson (1950), the user in this case should have available complete information concerning the cost of each operation as well as an estimate of the contingent gain or loss which will result if the forecast events do not occur. Then, in order to keep the cost of the series of operations at a minimum, decisions should be made by balancing the probability of occurrence of the foreoast event against the ratio of the cost to the contingent gain or loss.
  • Prudent avoidance principle in risk management
  • Precautionary principle in risk management

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