"Risk analysis only works if you know the full extent of consequences"

I wrote this paragraph in response to one statement from the nice post  https://webdeveloper.app/we-dont-know-enough-about-covid-19-thats-exactly-why-you-should-be-careful/.

"Risk analysis only works if you know the full extent of consequences"

 In one sense, this is obviously true.  If you want to compute the probability of losing a specific amount, then you need to know the probability of each possible outcome.

On the other hand, we are human beings with limited knowledge.  It’s impossible to know all of the possible outcomes and the unknown unknowns (https://en.wikipedia.org/wiki/There_are_known_knowns).  

We still need to make decisions.  There are two possible options that come to mind:  

1) Abandon risk analysis and be very conservative.
2) Make your best guesses about the probabilities for risk analysis based on the flawed data that you do have.  

Of course there are many possible ways to intelligently plan in the face of uncertainty (https://jeremykun.com/2013/10/28/optimism-in-the-face-of-uncertainty-the-ucb1-algorithm/).

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