Cognitive Psychological Approach for Risk Assessment in Construction Projects

Abstract

With ever increasing complexities, construction projects are constantly exposed to a variety of risks associated with all stages of project execution from the initial assessment of strategic options through procurement, fabrication, construction, and commissioning. The successful delivery of construction projects and assurance of project objectives largely depend on the appropriate management of all project risks. One of the major steps in project risk management is to assess the potential risks. It lays the basis for selecting and implementing effective response strategies to mitigate the risks, and avoid undesirable consequences such as project delays and cost overruns. This paper proposes a new approach for risk assessment in construction projects. The approach interprets the subjective risk assessments by experts with a statistical method motivated by a cognitive psychology theory. By considering attributes of risks as random variables, experts as information processing systems, and expert opinion solicitation as a sampling process on the variables, the approach is designed to estimate the probability distributions of the attributes of perceived risks and analyze their criticality. Risk criticality is a quantification of the overall significance of risks determined by their probability of occurrence and level of impact. The approach was applied to the assessment of three safety risks in Beijing Olympic venue construction projects. This case study demonstrated the capabilities of the approach in quantitatively assessing the attributes of risks and prioritizing risks based on their criticalities. It also showed the advantage of the approach over traditional risk assessment approaches in revealing the features of risks under varying situations and recognizing the significance of risks that have low probability of occurrence but high level of impact.