THE SECONDARY RISK CONUNDRUM IN CONSTRUCTION PROJECTS – AN ASSESSMENT OF THE BEHAVIORAL BIASES

Abstract

Effective project risk management is achieved through identification, assessment, and redressal of risk. However, even a well-developed risk response action has the potential to trigger risky events – also called secondary risks – which would not occur if this action were not taken. This points to the susceptibility of the decision-making process to cognitive biases. This study investigates which of these biases exposes the risk response actions to generation of secondary risk. For this purpose, several behavioral factors and cognitive biases are synthesized from the literature and the top selected factors are investigated through semi-structured interviews of senior construction management professionals. It is found that they are not mindful of their decisions giving rise to the secondary risk and the most influencing factor causing this is availability. Therefore, debiasing strategies are provided to fine-tune decision-making. This study emphasizes holistic, informed, farsighted and unbiased decision-making to improve the project risk management