Conceptualizing and characterizing risk: A risk science perspective beyond traditional economic approaches

Abstract Economists commonly conceptualize and characterize risk through metrics such as expected values, variance, value‐at‐risk, and objective probability distributions. This paper reviews these economic approaches from the perspective of contemporary risk science, which offers a holistic and unified framework for understanding and describing risk. Drawing on foundational risk science concepts and principles, the analysis demonstrates how this broader viewpoint integrates uncertainties, knowledge aspects, and potential surprises (black swans), providing new insights for both general risk conceptualization and economic applications. The paper concludes by discussing implications for risk assessment and management, arguing that adopting a risk science lens enhances decision‐making, balancing different concerns.