Risk Savvy: How to Make Good Decisions

Valutazione media 3,97
( su 639 valutazioni fornite da Goodreads )
 
9780670025657: Risk Savvy: How to Make Good Decisions

An eye-opening look at the ways we misjudge risk every day and a guide to making better decisions with our money, health, and personal lives

In the age of Big Data we often believe that our predictions about the future are better than ever before. But as risk expert Gerd Gigerenzer shows, the surprising truth is that in the real world, we often get better results by using simple rules and considering less information.

In Risk Savvy, Gigerenzer reveals that most of us, including doctors, lawyers, financial advisers, and elected officials, misunderstand statistics much more often than we think, leaving us not only misinformed, but vulnerable to exploitation. Yet there is hope. Anyone can learn to make better decisions for their health, finances, family, and business without needing to consult an expert or a super computer, and Gigerenzer shows us how.

Risk Savvy is an insightful and easy-to-understand remedy to our collective information overload and an essential guide to making smart, confident decisions in the face of uncertainty.

Le informazioni nella sezione "Riassunto" possono far riferimento a edizioni diverse di questo titolo.

About the Author:

Gerd Gigerenzer is the author of Gut Feelings. He is currently the director of the Max Planck Institute for Human Development in Berlin, Germany, and lectures around the world on the importance of proper risk education for everyone from school-age children to prominent doctors, bankers, and politicians.

Excerpt. © Reprinted by permission. All rights reserved.:

Praise for Gerd Gigerenzer’s Work

“Logic be damned! . . . Gigerenzer delivers a convincing argument for going with your gut.”

—Men’s Health

“All innumerates—buyers, sellers, students, professors, doctors, patients, lawyers and their clients, politicians, voters, writers, and readers—have something to learn from Gigerenzer.”

—Publishers Weekly

“Gladwell drew heavily on Gigerenzer’s research. But Gigerenzer goes a step further by explaining just why our gut instincts are so often right.”

—Businessweek

“[Gigerenzer] has the gift of exposition and several times gives the reader that Eureka! feeling.”

—The Telegraph (UK)

“Gerd Gigerenzer, director of the Max Planck Institute for Human Development in Berlin, locates specific strategies that the unconscious mind uses to solve problems. These are not impulsive or capricious responses, but evolved methods that lead to superior choices.”

—The Boston Globe

PENGUIN BOOKS

RISK SAVVY

Gerd Gigerenzer is the author of Gut Feelings. He is currently the director of the Max Planck Institute for Human Development in Berlin, Germany, and lectures around the world on the importance of proper risk education for everyone from school-age children to prominent doctors, bankers, and politicians.

Creativity requires the courage to let go
of certainties.

Erich Fromm

To be alive at all involves some risk.

Harold Macmillan

1

Are People Stupid?

Knowledge is the antidote to fear.

Ralph Waldo Emerson

Remember the volcanic ash cloud over Iceland? The subprime disaster? How about mad cow disease? Each new crisis makes us worry until we forget and start worrying about the next one. Many of us found ourselves stranded in crowded airports, ruined by vanishing pension funds, or anxious about tucking into a yummy beef steak. When something goes wrong, we are told that the way to prevent further crisis is better technology, more laws, and bigger bureaucracy. How to protect ourselves from the next financial crisis? Stricter regulations, more and better advisers. How to protect ourselves from the threat of terrorism? Homeland security, full body scanners, further sacrifice of individual freedom. How to counteract exploding costs in health care? Tax hikes, rationalization, better genetic markers.

One idea is absent from these lists: risk-savvy citizens. And there is a reason.

“Human beings are fallible: lazy, stupid, greedy and weak,” an article in the Economist announced.1 We are said to be irrational slaves to our whims and appetites, addicted to sex, smoking, and electronic gadgets. Twenty-year-olds drive with their cell phones glued to their ears, oblivious to the fact that doing so lowers their reaction time to that of a seventy-year-old. A fifth of Americans believe that they are in the top 1 percent income group and just as many believe that they will soon be there. Bankers have little respect for people’s ability to invest money, and some doctors tell me that most of their patients lack intelligence, making it pointless to disclose health information that might be misunderstood in the first place. All of this points to the conclusion that Homo sapiens (“man the wise”) is a misnomer. Something has gone wrong in our genes. Evolution seems to have cheated us with shabby mental software and miswired our brains. In short, John and Jane Q. Public need continuous guidance, as a child needs a parent. Although we live in the high-tech twenty-first century, some form of paternalism is the only viable strategy: Close the doors, collect the experts, and tell the public what’s best for them.

This fatalistic message is not what you will read in this book.2 The problem is not simply individual stupidity, but the phenomenon of a risk-illiterate society.

Literacy—the ability to read and write—is the lifeblood of an informed citizenship in a democracy. But knowing how to read and write isn’t enough. Risk literacy is the basic knowledge required to deal with a modern technological society. The breakneck speed of technological innovation will make risk literacy as indispensable in the twenty-first century as reading and writing were in previous centuries. Without it, you jeopardize your health and money, or may be manipulated into unrealistic fears and hopes. One might think that the basics of risk literacy are already being taught. Yet you will look in vain for it in most high schools, law schools, medical schools, and beyond. As a result, most of us are risk illiterate.

When I use the general term risk savvy I refer not just to risk literacy, but also more broadly to situations where not all risks are known and calculable. Risk savvy is not the same as risk aversion. Without taking risks, innovation would end, as would fun, and courage would belong to the past. Nor does risk savvy mean turning into a reckless daredevil or BASE jumper, denying the possibility of landing on one’s nose. Without a beneficial degree of caution, humans would have ceased to exist long ago.

You might think, why bother if there are experts to consult? But it isn’t that simple. Bitter experience teaches that expert advice may be a dangerous thing. Many doctors, financial advisers, and other risk experts themselves misunderstand risks or are unable to communicate them in an understandable way. Worse, quite a few have conflicts of interest or are so afraid of litigation that they recommend actions to clients they would never recommend to their own families. You have no choice but to think for yourself.

I’d like to invite you into the world of uncertainty and risk, beginning with weather reports and a very humble hazard, getting soaked.

Chances of Rain

A weathercaster on U.S. television once announced the weather this way:

The probability that it will rain on Saturday is 50 percent. The chance that it will rain on Sunday is also 50 percent. Therefore, the probability that it will rain on the weekend is 100 percent.

Most of us will smile at this.3 But do you know what it means when the weather report announces a 30 percent chance of rain tomorrow? 30 percent of what? I live in Berlin. Most Berliners believe that it will rain tomorrow 30 percent of the time; that is, for seven to eight hours. Others think that it will rain in 30 percent of the region; that is, most likely not where they live. Most New Yorkers think both are nonsense. They believe that it will rain on 30 percent of the days for which this announcement is made; that is, there will most likely be no rain at all tomorrow.4

Are people hopelessly confused? Not necessarily. Part of the problem is the experts who never learned how to explain probabilities in the first place. If they clearly stated the class to which a chance of rain refers, the confusion would disappear. Time? Region? Days? What meteorologists intend to say is that it will rain on 30 percent of the days for which this prediction is made. And “rain” refers to any amount above some tiny threshold, such as 0.01 inches.5 Left on their own, people intuitively fill in a reference class that makes sense to them, such as how many hours, where, or how heavily it rains. More imaginative minds will come up with others still. As one woman in New York said, “I know what 30 percent means: Three meteorologists think it will rain, and seven not.”

Here is my point. New forecasting technology has enabled meteorologists to replace mere verbal statements of certainty (“it will rain tomorrow”) or chance (“it is likely”) with numerical precision. But greater precision has not led to greater understanding of what the message really is. The confusion over probabilities of rain has persisted in fact since the very first time they were broadcast to the public in 1965 in the United States. This confusion is not just limited to rain, but occurs whenever a probability is attached to a single event—such as “if you take an antidepressant, you have a 30 percent chance of developing a sexual problem.” Does that mean that 30 percent of all people will develop a sexual problem, or that you yourself will have a problem in 30 percent of your sexual encounters? The solution to clearing this widespread and long-standing muddle is surprisingly simple:

Always ask for the reference class: Percent of what?

If weathercasters were taught how to communicate to the public, you wouldn’t even have to ask.

Getting soaked is a minor risk, although for some, from the farmer to Ferrari, the chances of rain matter. Before the Formula 1 Grand Prix, one of the most-discussed issues is the weather forecast—choosing the right tires are the key to winning the race. The same holds for NASA: The weather forecast is essential for approving or canceling a space shuttle launch, as the Challenger disaster tragically illustrates. Yet for most of us, all that is at stake is canceling a family outing unnecessarily or getting wet feet. People may not make a special effort to understand chances of rain simply because the hazards are modest. Are we more risk savvy when something truly important is at stake?

Figure 1-1. What does a “30 percent chance of rain tomorrow” mean? Some believe it will rain tomorrow 30 percent of the time (upper panel). Others believe it will rain tomorrow in 30 percent of the region (middle panel). Finally, some believe that three meteorologists think that it will rain and seven do not (lower panel). What meteorologists in fact intend to say is something different: that it will rain on 30 percent of the days for which this announcement is made. The problem is not simply in people’s minds, but in the failure of experts to state clearly what they mean.

Pill Scare

Great Britain has many traditions, one of them being the contraceptive pill scare. Since the early 1960s, women are alarmed every couple of years by reports that the pill can lead to thrombosis, potentially life-threatening blood clots in the legs or lungs. In the most famous scare, the UK Committee on Safety of Medicines issued a warning that third-generation oral contraceptive pills increased the risk of thrombosis twofold—that is, by 100 percent. How much more certain can you get? This terrifying information was passed on in “Dear Doctor” letters to 190,000 general practitioners, pharmacists, and directors of public health and was presented in an emergency announcement to the media. Alarm bells rang around the country. Distressed women stopped taking the pill, which caused unwanted pregnancies and abortions.6

Just how big is 100 percent? The studies on which the warning was based had shown that of every seven thousand women who took the earlier, second-generation pill, about one had a thrombosis; and that this number increased to two among women who took third-generation pills. That is, the absolute risk increase was only one in seven thousand, whereas the relative risk increase was indeed 100 percent. As we see, in contrast to absolute risks, relative risks appear threateningly large and can cause a great stir. Had the committee and the media reported the absolute risks, few women would have panicked and dropped the pill. Most likely, no one would have even cared.

This single scare led to an estimated thirteen thousand (!) additional abortions in the following year in England and Wales. But the fallout lasted for longer than one year. Before the alert, abortion rates had been steeply on the decline, but afterward, this trend was reversed and abortion rates increased for years to come. Women’s confidence in oral contraceptives was undermined, and pill sales fell sharply. Not all unwanted pregnancies were aborted; for every abortion there was also one extra birth. The increase in both abortions and births was particularly pronounced among girls under sixteen, with some eight hundred additional conceptions.

Ironically, pregnancies and abortions are associated with a risk of thrombosis that exceeds that of the third-generation pill. The pill scare hurt women, hurt the National Health Service, and even brought down the stocks of the pharmaceutical industry. The resulting increase in costs to the National Health Service for abortion provision has been estimated at £4–6 million. Among the few who profited were the journalists who got the story on the front page.

An unwanted pregnancy and abortion is not something to be taken lightly. As one woman reports:

When I learned that I was pregnant, my partner and I were together for two years. His first reaction was: “Come back when it’s gone.” I threw him out and tried to find a solution. I wanted so much to begin with college. I fought for building a future for us, but I began to realize there was none. The one thing I did not want was to become dependent on the government, or—even worse—on a man. Therefore I decided last minute for an abortion. It’s now two days ago, and I have one nervous breakdown after the other. My mind says, it was the best decision, but my heart weeps.

The tradition of pill scares continues to the present day, and always with the same trick. The solution is not better pills or more sophisticated abortion technology, but risk-savvy young women and men. It would not be so difficult to explain to teenagers the simple distinction between a relative risk (“100 percent”) and an absolute risk (“one in seven thousand”). After all, batting averages and other sports statistics are common knowledge for many, young and old. Yet to the present day journalists have succeeded in causing scares with BIG numbers, and the public predictably panics, year after year.

Once again, the remedy is a simple rule:

Always ask: What is the absolute risk increase?

Journalists are not the only ones who play on our emotions with the help of numbers. Top medical journals, health brochures, and the Internet also inform the public in terms of relative changes, because bigger numbers make better headlines. In 2009 the prestigious British Medical Journal published two articles on oral contraceptives and thrombosis: One made the absolute numbers transparent in its abstract, while the other again touted relative risks, reporting that “oral contraceptives increased the risk of venous thrombosis fivefold.”7 The “fivefold” increase of course made for more spectacular headlines, and some newspapers, such as the London Evening Standard, didn’t even bother mentioning the absolute numbers. As a rule, although we have high-tech medicine, understandable information for patients and doctors remains the exception.

It should be the ethical responsibility of every editor to enforce transparent reporting and it should be on the agenda of every ethics committee and every department of health. But it is not. After publication of my book Calculated Risks, which explains how to help both the public and doctors understand numbers, the neuroscientist Mike Gazzaniga, then dean of the faculty at Dartmouth College, paid me a visit. Outraged by the tricks played on the public by the use of relative ...

Le informazioni nella sezione "Su questo libro" possono far riferimento a edizioni diverse di questo titolo.

I migliori risultati di ricerca su AbeBooks

1.

Gigerenzer, Gerd
Editore: Viking 2014-04-17 (2014)
ISBN 10: 0670025658 ISBN 13: 9780670025657
Nuovi Rilegato Quantità: 8
Da
ThriftTaco
(INDIAN TRAIL, NC, U.S.A.)
Valutazione libreria
[?]

Descrizione libro Viking 2014-04-17, 2014. Hardcover. Condizione libro: New. 0670025658 Brand new and ships pronto! 100% guarantee. Multiple quanities available. Codice libro della libreria BOOKS93-9780670025657-11-9307

Maggiori informazioni su questa libreria | Fare una domanda alla libreria

Compra nuovo
EUR 4,96
Convertire valuta

Aggiungere al carrello

Spese di spedizione: EUR 3,42
In U.S.A.
Destinazione, tempi e costi

2.

Gigerenzer, Gerd
Editore: Viking
ISBN 10: 0670025658 ISBN 13: 9780670025657
Nuovi Rilegato Quantità: 1
Da
ACJBooks
(Staten Island, NY, U.S.A.)
Valutazione libreria
[?]

Descrizione libro Viking. Hardcover. Condizione libro: New. 0670025658. Codice libro della libreria 6ANDREWWD262

Maggiori informazioni su questa libreria | Fare una domanda alla libreria

Compra nuovo
EUR 5,95
Convertire valuta

Aggiungere al carrello

Spese di spedizione: EUR 5,13
In U.S.A.
Destinazione, tempi e costi

3.

Gerd Gigerenzer
ISBN 10: 0670025658 ISBN 13: 9780670025657
Nuovi Quantità: 1
Da
Castle Rock
(Pittsford, NY, U.S.A.)
Valutazione libreria
[?]

Descrizione libro Condizione libro: Brand New. Book Condition: Brand New. Codice libro della libreria 97806700256571.0

Maggiori informazioni su questa libreria | Fare una domanda alla libreria

Compra nuovo
EUR 11,18
Convertire valuta

Aggiungere al carrello

Spese di spedizione: EUR 3,42
In U.S.A.
Destinazione, tempi e costi

4.

Gerd Gigerenzer
Editore: PENGUIN PUTNAM TRADE (2014)
ISBN 10: 0670025658 ISBN 13: 9780670025657
Nuovi Rilegato Quantità: 5
Da
Powell's Books
(Portland, OR, U.S.A.)
Valutazione libreria
[?]

Descrizione libro PENGUIN PUTNAM TRADE, 2014. Hardcover. Condizione libro: New. HARDCOVER Legendary independent bookstore online since 1994. Reliable customer service and no-hassle return policy. History and Social Science>Sociology. Book: NEW, New. Bookseller Inventory # 02978067002565700. Codice libro della libreria 02978067002565700

Maggiori informazioni su questa libreria | Fare una domanda alla libreria

Compra nuovo
EUR 16,71
Convertire valuta

Aggiungere al carrello

Spese di spedizione: EUR 3,84
In U.S.A.
Destinazione, tempi e costi

5.

Gerd Gigerenzer
Editore: Viking (2014)
ISBN 10: 0670025658 ISBN 13: 9780670025657
Nuovi Rilegato Quantità: 1
Da
Irish Booksellers
(Rumford, ME, U.S.A.)
Valutazione libreria
[?]

Descrizione libro Viking, 2014. Hardcover. Condizione libro: New. book. Codice libro della libreria 0670025658

Maggiori informazioni su questa libreria | Fare una domanda alla libreria

Compra nuovo
EUR 22,15
Convertire valuta

Aggiungere al carrello

Spese di spedizione: GRATIS
In U.S.A.
Destinazione, tempi e costi

6.

Gigerenzer, Gerd
Editore: Viking (2014)
ISBN 10: 0670025658 ISBN 13: 9780670025657
Nuovi Rilegato Quantità: 2
Da
Murray Media
(North Miami Beach, FL, U.S.A.)
Valutazione libreria
[?]

Descrizione libro Viking, 2014. Hardcover. Condizione libro: New. Codice libro della libreria P110670025658

Maggiori informazioni su questa libreria | Fare una domanda alla libreria

Compra nuovo
EUR 28,19
Convertire valuta

Aggiungere al carrello

Spese di spedizione: EUR 2,56
In U.S.A.
Destinazione, tempi e costi

7.

Gigerenzer, Gerd
Editore: Viking
ISBN 10: 0670025658 ISBN 13: 9780670025657
Nuovi Rilegato Quantità: 1
Da
Cloud 9 Books
(Wellington, FL, U.S.A.)
Valutazione libreria
[?]

Descrizione libro Viking. Hardcover. Condizione libro: New. 0670025658 New Condition. Codice libro della libreria NEW6.1219316

Maggiori informazioni su questa libreria | Fare una domanda alla libreria

Compra nuovo
EUR 52,90
Convertire valuta

Aggiungere al carrello

Spese di spedizione: EUR 4,27
In U.S.A.
Destinazione, tempi e costi