We deal with appetites and thresholds every day, both personally and professionally. Project risk management is no exception and knowing your appetite and threshold may save your project a lot of grief.
When managing project risks (or any risks for that matter), I’ve found that there are always two versions of appetite and threshold. The first is what I’ll call the “perceived” level and the second is the “actual” level. This may sound like splitting hairs, but I’ve found multiple times on projects that they both do exist and always come into play at some point.