Wharton Risk Management Center

For three decades, the Risk Management and Decision Processes Center at the Wharton School of the University of Pennsylvania has been at the forefront of basic and applied research to promote effective corporate and public policies for low-probability events with potentially catastrophic consequences. The Wharton Risk Center has focused on natural and technological hazards through the integration of risk assessment and risk perception with risk management strategies. After the attacks of September 11, 2001, research activities were extended to include national security issues (e.g., terrorism risk insurance, protection of critical infrastructure).

Building on the disciplines of economics, finance, insurance, marketing, psychology and decision sciences, the Center’s research program is oriented around descriptive and prescriptive analyses. Descriptive research focuses on how individuals and organizations interact and make decisions regarding the management of risk under existing institutional arrangements. Prescriptive analyses propose ways that individuals and organizations, both private and governmental, can make better decisions regarding risk.

The Center supports and undertakes field and experimental studies of risk and uncertainty to better understand the linkage between descriptive and prescriptive approaches under various regulatory and market conditions.

In the past several years, the Center has significantly increased its size to now include 70 faculty, research fellows, students and visiting scholars from all over the world to undertake large-scale initiatives. Providing expertise and a neutral environment for discussion, the Center team is also concerned with training decision makers and promoting a dialogue among industry, government, interest groups and academics through its research and policy publications and through sponsored seminars, roundtables and forums. Our newsletter and issue briefs provide updates of Center activities and publications.

For analysis of financing and management of large-scale catastrophes, contact the Wharton Risk Center’s directors: Howard Kunreuther, kunreuther@wharton.upenn.edu; Robert Meyer, meyerr@wharton.upenn.edu; Erwann Michel Kerjan, erwannmk@wharton.upenn.edu.


Risk Regulation Seminars:
The Wharton Risk Management and Decision Processes Center, in conjunction with the Penn Program on Regulation, hosts an interdisciplinary seminar series on risk regulation. Additional information is available on the seminar website.


Living with Climate Change: Will Paris Make a Difference?

February 16, 2016
Dale Jamieson, Professor of Environmental Studies and Philosophy, New York University
Jennifer Jacquet, Assistant Professor of Environmental Studies, New York University

The twenty-first Conference of the Parties (COP21) of the United Nations Framework Convention on Climate Change (UNFCCC) in Paris ended with an agreement that some call “the world’s greatest diplomatic success” while others insist it is “too weak” and full of “false hope”. Both of these judgments are premature. Paris has created a pathway for success, but the agreement itself cannot ensure it. The force of the Paris agreement rests more on social and political obligations than on legal authority.  Its primary function is to facilitate ‘pledge and review’ – a frequent model of international cooperation in the post World War II period, and incorporates economist Thomas Schelling’s insight that, “A potent means of commitment, and sometimes the only means, is the pledge of one’s reputation.” This talk examines the ways that Paris adds to the UNFCCC agreement of 1992, why things might be different this time around, and the challenges in assuring the Paris agreement’s success, which ultimately rests not just on nations, but also on civil society and corporations.

Video: Living with Climate Change: Will Paris Make a Difference?  

Net Benefits of the Acid Rain Program

March 1, 2016
Maureen Cropper, Distinguished University Professor of Economics, University of Maryland
Maureen Cropper is a Distinguished University Professor of Economics at the University of Maryland, a Senior Fellow at Resources for the Future, and a former Lead Economist at the World Bank. Dr. Cropper has served as chair of the EPA Science Advisory Board Environmental Economics Advisory Committee and as president of the Association of Environmental and Resource Economists. She is a member of the National Academy of Sciences and a Research Associate of the National Bureau of Economic Research. Her research has focused on valuing environmental amenities (especially environmental health effects), on the discounting of future health benefits, and on the tradeoffs implicit in environmental regulations.

What’s New in Terrorism Risk Analysis and Homeland Security

April 5, 2016
Detlof von Winterfeldt, Professor of Public Policy and Management, University of Southern California; Co-founder and Director,  National Center for Risk and Economic Analysis of Terrorism Events (CREATE).


Global Perspectives on the Dutch Climate Change Litigation

November 17, 2015
Roger Cox, Partner, Paulussen Advocaten (attorney for Urgenda Foundation)
Lucas Bergkamp, Partner, Hunton & Williams (Brussels)
Veerle Heyvaert, London School of Economics

From 20th Century Environmental Protection to 21st Century Sustainability

October 27,  2015
Daniel C. Esty, Yale Law School & Yale School of Forestry & Environmental Studies

Modern environmental law builds on a 1970s model of how best to protect natural resources and address pollution harms focused on “command and control” mandates from the federal government. Significant progress on many environmental problems was achieved in the 20th Century using this approach, but this model now seems outdated in a number of critical respects. Professor Esty will offer an analysis of these limitations and will put forward an alternative 21st Century “sustainability” strategy that might reinvigorate the response to today’s residual environmental problems and related energy challenges.

Dan Esty is the Hillhouse Professor at Yale University with primary appointments at the Environment and Law Schools, and a secondary appointment at the Yale School of Management. He also serves as the Director of the Yale Center for Environmental Law and Policy and serves on the Board of the Center for Business and the Environment at Yale, which he founded in 2006. Professor Esty is the author or editor of ten books and dozens of articles on environmental protection, energy, and sustainability — and their connections to policy, corporate strategy, competitiveness, trade, and economic success. From 2011 to early 2014, Professor Esty served as Commissioner of Connecticut’s Department of Energy and Environmental Protection. Prior to taking up his Yale Professorship in 1994, he served in a variety of senior positions at the US Environmental Protection Agency and was a senior fellow at the Peterson Institute for International Economics in Washington, DC.

Reshaping the Financial Regulatory System

October 13, 2015
Michael Bradfield, General Counsel, Volcker Alliance
Shelley H. Metzenbaum, Senior Advisor, Volcker Alliance
Gaurav Vasisht, Director, Financial Regulation, Volcker Alliance

In a recent report, the Volcker Alliance, a non-partisan, non-profit organization founded by former Chairman of the Board of the Federal Reserve Paul A. Volcker, concludes that the U.S. system of financial regulation is “highly fragmented, outdated, and ineffective.”  Notwithstanding the reforms enacted in the wake of the 2007-2008 financial crisis, the Alliance finds there is much more work to be done.  According to its report, “a multitude of federal agencies, self-regulatory organizations, and state authorities share oversight of the financial system under a framework riddled with regulatory gaps, loopholes, and inefficiencies.”  In this seminar, three members of the Volcker Alliance team will discuss the findings in the report and a framework for financial reform suitable for the 21st century.  The speakers will not only address regulatory vulnerabilities and weaknesses remaining in the wake of the Dodd-Frank Act but also will consider new vulnerabilities that have emerged in the financial system since then.


Climate Change Policy and the Upcoming Paris COP21 Talks
March 24, 2015


What is required to achieve climate change policies that will reduce the weather-related risks associated with global warming? Lead authors from the newly released Fifth Assessment Report (AR5) of the Intergovernmental Panel on Climate Change (IPCC) – the most comprehensive assessment of climate change yet undertaken – will highlight key findings from the report that would be useful to consider in the upcoming Paris COP21 talks. The IPCC Fifth Assessment Report provides an up-to-date view of the scientific understanding of climate change and risk perception, and the impact these have on different levels of decision-making and policy options. This seminar will be of interest to anyone interested in the future of international efforts to address this global environmental problem.

Michael Oppenheimer
Albert G. Milbank Professor of Geosciences and International Affairs, Woodrow Wilson School and Department of Geosciences, Princeton University

David G. Victor
Professor; Director, Laboratory on International Law and Regulation, UC San Diego

Elke Weber
Jerome A. Chazen Professor of International Business; Co-Director, Center for the Decision Sciences, Columbia University

Moderated by Howard Kunreuther
James G. Dinan Professor of Decision Sciences & Public Policy; Co-Director, Risk Management and Decision Processes Center, The Wharton School, University of Pennsylvania

LEADERSHIP DISPATCHES: Chile’s Extraordinary Comeback from Disaster
February 24, 2015

Imagine you are the newly elected president of your country, waiting to enter office. Just ten days before your inauguration, a massive 8.8 earthquake rocked your country. How do you prepare for the recovery process? How do you bring your country back on track rapidly?  Mike Useem, Howard Kunreuther and Erwann Michel-Kerjan will describe how the President of Chile did just that after the February 2010 Maule earthquake. The trio had access to the president, his cabinet, and leaders from the private and civic sectors who all took part in this remarkable recovery. The story of Chile’s rapid revival has just been published as a book entitled Leadership Dispatches: Chile’s Extraordinary Comeback from Disaster by Stanford University Press. http://sup.org/book.cgi?id=25059.

Michael Useem, William and Jaclyn Egan Professor of Management and Director of the Center for Leadership and Change Management, Wharton School, University of Pennsylvania.
Howard Kunreuther, James G. Dinan Professor of Decision Sciences and Public Policy, and Co-Director, Center for Risk Management and Decision Processes, Wharton School.
Erwann O. Michel-Kerjan, Executive Director, Center for Risk Management and Decision Processes, Wharton School, and Chairman of the OECD Secretary General Board on Financial Management of Catastrophes.

The Risks and Regulatory Challenges of Unconventional Oil and Gas Development
February 3, 2015

Bernard Goldstein,  Dean, University of Pittsburgh Graduate School of Public Health
Mitchell Small, H. John Heinz Professor of Civil and Environmental Engineering, Carnegie Mellon
Hannah Wiseman, Attorney’s Title Professor, Florida State University College of Law
Moderator: Adam Finkel, Senior Fellow and Executive Director, Penn Program on Regulation, University of Pennsylvania Law School

The ability to recover oil and natural gas from previously-inaccessible geologic formations is simultaneously being described as a silver bullet for economic growth and energy independence, as well as a land-use disaster and a “game-changing” accelerant of global climate change.  While assessing the probability and magnitude of risks to public health and the environment continues to occupy researchers, regulatory authorities in the U.S. and around the world must confront whether and how to assert controls over the pace of, and safeguards upon, technologies including the “fracking” of shale to release natural gas and surface mining or steam injection of oil sands.  In just the past month, one U.S. state has banned hydraulic fracturing altogether (New York), while another has given it a definitive but regulated green light (Maryland).  This seminar will feature presentations by, and discussion among, three leading scholars of the regulatory governance of unconventional oil and gas development.  Panel members will share their insights on how regulators can balance the various conflicting policy and economic interests that surround hydraulic fracturing and other unconventional techniques of energy extraction. This seminar is co-sponsored by the Penn Program on Regulation, the Wharton Risk Management and Decision Processes Center, and the Kleinman Center for Energy Policy at the University of Pennsylvania. 

Fall 2014 Risk Regulation Seminar Series

How Do Bank Regulators Determine Capital Adequacy Regulations?

October 21, 2014
Eric Posner, Kirkland and Ellis Distinguished Service Professor, University of Chicago Law School

November 18, 2014

Panel Discussion on EPA’s Climate Action Plan
Joel Beauvais, Associate Administrator for the Office of Policy, U.S. Environmental Protection Agency
Dallas Burtraw, Darius Gaskins Senior Fellow and Associate Director, Center for Climate and Electricity Policy, Resources for the Future
Tomás Carbonell, Attorney, Environmental Defense Fund
Jeffrey R. Holmstead, Former EPA Assistant Administrator for Air and Radiation
Moderated by Cary Coglianese, Edward B. Shils Professor of Law and Director, Penn Program on Regulation, University of Pennsylvania Law SchoolIn the wake of a groundbreaking agreement between China and the United States to reduce greenhouse gas emissions, climate change action appears to be gaining political momentum in the lead-up to a major international climate meeting in Paris in 2015. The agreement with China commits the United States to a variety of initiatives to promote innovation and echoes President Obama’s “Climate Action Plan” in setting an ambitious goal to reduce economy-wide emissions by 26-28 percent of 2005 levels by 2025.  Starting the conversation, Joel Beauvais, current Associate Administrator for the EPA’s Office of Policy, presented an informative outline of the EPA’s climate change initiatives, focusing particularly on the Clean Power Plan proposal.

Cybersecurity and law Enforcement Back Doors

Jeffrey Vagle, Lecturer in Law and Executive Director of the Center for Technology, Innovation and Competition at the University of Pennsylvania Law School
Matt Blaze, Associate Professor of Computer and Information Science at the School of Engineering and Applied Science at the University of Pennsylvania
Moderated by Howard Kunreuther, James G. Dinan Professor of Decision Sciences & Public Policy; Co-Director, Risk Management and Decision Processes Center, Wharton School, University of Pennsylvania

This panel will explore the legal and technical issues surrounding the difficult policy question regarding law enforcement agencies’ ability to bypass software security to gain access to user data. Cybersecurity experts, such as those on this panel, agree that the creation of security “back doors” carries a significant risk of weakening system security in unexpected ways. In other words, laws or policies that allow back door access by the government can easily become a vector for criminals and foreign intelligence agencies to hack into government, commercial, and individual computer systems and networks.
Article in Knowledge@Wharton

Spring 2014 Risk Regulation Seminar Series

February 18, 2014
Does Regulation Kill Jobs?
Richard L. Revesz, Dean Emeritus and Lawrence Kind Professor of Law, New York University
Sarah L. Stafford, Professor of Economics, Public Policy and Law, College of William & Mary
Cary Coglianese, Director, Penn Program on Regulation; Edward B. Shils Professor of Law, University of Pennsylvania
Adam Finkel, Executive Director, Penn Program on Regulation, University of Pennsylvania

March 4, 2014
A Conversation with the OIRA Administrator
Hon. Howard Shelanski, Administrator, Office of Information and Regulatory Affairs

March 25, 2014
How Well is Obamacare Working?: A Panel Discussion
Tom Baker, Measey Professor of Law and Health Sciences, Penn Law
Mark Duggan, Rowan Family Foundation Professor, Wharton School
Mark V. Pauly, Bendheim Professor, Wharton SchoolThe Affordable Care Act has been fraught with controversy and conflict, but its implementation nevertheless moves forward in an effort to achieve the objectives set by President Obama and the law’s proponents in Congress.

This seminar will provide a basis for taking stock of Obamacare at its fourth anniversary. Featuring the latest research on the law’s implementation and impacts produced by three of the nation’s foremost authorities on health care and insurance policy, the seminar will consider how states have responded to health care reform, what impacts Obamacare is having on small businesses and insurers, and how the law and its implementation might be improved.VIDEO     SLIDES

Fall 2013 Risk Regulation Seminar Series

October 14, 2013
Risk and Opportunity: Managing Risk for Development (video)
Seminar Explores Risk Management as Instrument for Economic Development (RegBlog.org) 
Norman Loayza, Director, 2014 World Development Report, World Bank
Stéphane Hallegatte, Senior Economist, World Bank
Kyla Wethli, Core Team, 2014 World Development Report, World Bank
Moderator: Erwann Michel-Kerjan, Wharton School

November 12, 2013
Learning from Hurricane Sandy: A Panel Discussion on Reducing Future Disaster Losses (video)
Seminar Explores New Responses to Flood Risks (RegBlog.org)
Katherine Greig, NYC Mayor’s Office
Sean Kevelighan, Zurich NA
Marion McFadden, HUD
Roy Wright, FEMA
Moderator: Howard Kunreuther, Wharton School

Expert panel discussion on steps that are being taken to reduce losses from hurricanes and floods. The National Flood Insurance Reform Act of 2012, which passed three months before Hurricane Sandy, offers an opportunity to address how we can reduce future losses while providing better financial protection to disaster victims. But there are challenges in getting individuals to take these steps prior to a disaster, and affordability issues threaten to delay the implementation of key features of this legislation.

December 3, 2013
The Promise and Limits of Private Power: Promoting Labor Standards in a Global Economy

Richard M. Locke, Howard Swearer Director, Thomas J. Watson Jr. Institute for International Studies; Professor, Department of Political Science, Brown University
Moderator: Cary Coglianese, Penn Law

Howard Kunreuther is recipient of the 2015 Shin Research Excellence Award for his work on public-private partnerships.

Howard Kunreuther, Professor and co-director of the Wharton Risk Management Center, University of Pennsylvania has received the 2015 Shin Research Excellence Award from the Geneva Association and the International Insurance Society (IIS) in recognition of his outstanding work on the role of public-private partnerships in mitigating and managing risks.  Howard presented, “Insuring Against Extreme Events: The Need for Private-Public Partnerships” at the IIS’s 51st annual seminar June 14-17.     

Video: “Insuring Against Extreme Events: The Need for Public-Private Partnerships presentation” (with slides) (41 min.), June 16, 2015

Panel discussion (31 min.)

Interview with World Risk and Insurance News: “How to finance and protect against extreme events” (7 min.)


Zurich North America and the Wharton Risk Center’s whitepaper Beyond Katrina: Lessons In Creating Resilient Communities, outlines new flood resilience strategies and identifies the need to devote more resources to preventive measures rather than post-event disaster relief, and overcoming current infrastructure vulnerabilities.


Lloyd’s presents prestigious Science of Risk Prize to Wharton’s Erwann Michel-Kerjan for his work on climate change
The award recognizes Michel-Kerjan’s work on Evaluating Flood Resilience Strategies for Coastal Megacities, published this year in Science, which was jointly undertaken with Jeroen Aerts, Wouter Botzen, Hans de Moel (VU University, Amsterdam), Kerry Emanuel (MIT) and Ning Lin (Princeton University).

The Wharton School of the University of Pennsylvania Announces Multi-Year Cooperation with Zurich Insurance Group for Flood Resilience Research
Philadelphia, PA, July 23, 2013—The Wharton School of the University of Pennsylvania is pleased to announce a multi-year academic cooperation between the School’s Risk Management and Decision Processes Center and Zurich Insurance Group (Zurich) to develop key initiatives and research focused on flood resilience. Funding for this initiative will be provided by the Z Zurich Foundation.

The Wharton School announces $1.25 million gift from the Travelers Companies, Inc. to establish the Travelers/Wharton Partnership for Risk Management and Leadership Fund. More »

Learn Crisis Leadership from World’s Best: What can global decision-makers learn about what it takes prepare for and recover from massive crises?  Wharton Magazine, April 2015. Michael Useem, Howard Kunreuther and Erwann Michel-Kerjan describe how Chile’s leaders made and executed their decisions to enable Chile’s extraordinary comeback from the earthquake of February 27, 2010.


Could Flood Insurance be Privatised in the United States?  The Geneva Papers on Risk and Insurance, doi: 10.1057/gpp.2014.27
This paper provides the first large-scale quantification of risk-based premiums for over 300,000 residences prone to either storm surge or inland flooding using commercially developed probabilistic catastrophe models, and compares these premiums with those currently charged by the NFIP. Our findings reveal significant differences between the two. In some areas, the NFIP charges prices that are more than 15 times the pure premium, while other areas are charged up to three times less than the pure premium.

Evaluating Flood Resilience Strategies for Coastal MegacitiesScience  — Climate Adaptation 344(6183): 473-475. 2014. (Winner of the Lloyd’s Science of Risk Prize)

How Climate Change is Fueling the Miami Real Estate BoomBloombergBusinessweek, October 20, 2014.
South Florida’s best shot at coping with the long-term environmental threat may be a strategy that no doubt seems perverse to environmentalists: aggressively foster a collective belief that sea level rise is not something we urgently need to worry about.

Paying for Future CatastrophesThe New York Times Sunday Review, November 24, 2012.
Hurricane Sandy was not an isolated event. Twenty of the 30 most expensive insured catastrophes worldwide from 1970 to 2011 have occurred since 2001 — and 13 of them were in the United States. What’s next? And who will pay?

How resilient is your country? Nature, November 21, 2012.
Extreme events are on the rise. Governments must implement national and integrated risk-management strategies.

Redesigning Flood InsuranceScience, July 22, 2011.
The U.S. Congress is discussing options for continuing the NFIP, which now operates under a 1-year extension, set to expire on September 30, 2011. The Federal Emergency Management Agency (FEMA), which is responsible for the NFIP, is reanalyzing the program. A new strategy for managing floods can increase personal responsibility, decrease risk, and lower government exposure.

Masters of DisasterWharton Magazine, Spring 2010.
At Wharton’s Risk Management and Decision Processes Center, researchers are investigating why humans do such a poor job planning for, and learning from, catastrophes.

Corporate Associates and Research Sponsors are a vital part of the Wharton Risk Center’s operations. We invite you to become involved with the Risk Management and Decision Processes Center at the Wharton School as a Corporate Associate or Research Sponsor.

The Wharton Risk Center celebrated its 30th anniversary with a symposium on “The Future of Risk Management.”

See podcast at Knowledge@Wharton: What Have the Past 30 Years Taught Us About Managing Risk? 

See conference papers at  The Future of Risk Management.