Advanced Risk Analysis in Engineering Enterprise Systems

10

Extreme Event Theory

10.1    Introduction to Extreme and Rare Events

Extreme events refer to phenomena that have relatively extreme high or low degree of magnitude while rare events refer to phenomena that have relatively very low frequency of occurrence. The use of the term relative in describing both extreme and rare events is important because, as will be discussed later, the relative difference between the magnitudes and frequency of occurrence of these events is the primary reason why they are difficult to analyze and manage. As such, events that are both extreme and rare can be defined as follows.

Definition 10.1: Extreme and Rare Events and Phenomena

Extreme and rare events and phenomena have relatively very low frequency ...