Johnson & Kwak argue risk always has been, and will be, a vital ingredient in the making of profits. Eichengreen arugues that economic theories overrate risk. Which of them is right?
In a complex world with complex business models and complex human psychology, the answer to whether the importance of risk in business is overrated or rightly rated depends upon variables in uncertainty and risk-taking behavior that is dependent upon psychological choice-making models. Once the variables, the question of rating of risk can be answered for that set of variables.