Introduction

This chapter establishes the conceptual and philosophical foundations of risk analysis in engineering and economics. It begins by examining societal needs, technological complexity, and the increasing demand for systematic approaches to managing uncertainty and adverse outcomes. Historical perspectives are used to trace the evolution of risk concepts across engineering, economics, and public policy. The chapter introduces a systems framework that integrates knowledge, cognition, and decision-making under uncertainty. Special emphasis is placed on the roles of ignorance, both as a natural limitation of knowledge and as a structured phenomenon that can be classified and modeled. Aleatory and epistemic uncertainties are distinguished, along with their implications for modeling and analysis. The chapter concludes by discussing abstraction in system modeling, highlighting known, partially known, and unknown system aspects. Together, these elements provide the intellectual grounding for the methods and applications developed throughout the book.