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Dr John Coates, University of Cambridge: Cognitive wherewithal

Themes: Risk

Dr John Coates

The human dimension of risk is an important and under-explored aspect of risk management issues. How we perceive risk, and understanding patterns of behaviour and seeing how these relate to the processes of decision-making and policy development needs greater exploration. The School’s Cambridge Centre for Risk Studies 2nd Annual Meeting – ‘The Human Dimension of Risk: Perception, Behaviour and Decision-Making in Risk Management’ – took on that gigantic challenge.

Risk, argues Dr John Coates, Senior Research Fellow in Neuroscience & Finance at Cambridge Judge Business School, is pro-cyclical. We can go from being too risky to being risk-averse, and this change in sentiment can impact markets too. A bear market can lead to a crash, and a bull market to a bubble.