On the Semantics of Risk Propagation

Abstract

Risk propagation encompasses a plethora of techniques for analyzing how risk "spreads" in a given system. Albeit commonly used in technical literature, the very notion of risk propagation turns out to be a conceptually imprecise and overloaded one. This might also explain the multitude of modeling solutions that have been proposed in the literature. Having a clear understanding of what exactly risk is, how it be quantified, and in what sense it can be propagated is fundamental for devising high-quality risk assessment and decision-making solutions. In this paper, we exploit a previous well-established work about the nature of risk and related notions with the goal of providing a proper interpretation of the different notions of risk propagation, as well as revealing and harmonizing the alternative semantics for the links used in common risk propagation graphs. Finally, we discuss how these results can be leveraged in practice to model risk propagation scenarios.