Final answer:
Unplanned responses to risk events are reactions to unpredictable occurrences that one has little control over. Preparing for asymmetric risks with a conservative approach, akin to Plan B, is better than facing potential catastrophic outcomes by ignoring them.
Step-by-step explanation:
The question relates to unplanned responses to risk events, particularly in the context of economic risks. When individuals or organizations face a risk event that they did not anticipate, the responses that follow are unplanned. These are often reactions to external occurrences over which they have very little control, such as natural disasters, wars, or economic downturns. To address this, people resort to strategies akin to Plan B from Figure 20.1 as a form of mitigation to minimize the impact should the risk materialize.
Moreover, the concept of asymmetric risk highlighted in the book underscores the importance of preparing for low-probability but high-impact events. By formulating plans to deal with potentially catastrophic threats, even if the threat does not occur, the 'cost' is simply the time and effort invested. Conversely, neglecting such threats could lead to dire consequences. This reasoning is similar to why individuals purchase insurance: to protect against low-probability events that, if they occur, could be devastating.
Therefore, it is often more prudent to be conservative and prepare for high-impact risks, even if they're unlikely, rather than rely on luck and face possibly catastrophic outcomes.