In the aftermath of 11 September 2001, most people in the US believed that they or their families were highly likely to become victims of terrorist attacks. “Which is just off the charts crazy when you think about it for even a minute,” says , an author and risk consultant based in Canada. Instead of boarding planes, people in the US got in their cars. , the annual death toll on the road was on average 1100 higher than it had been in the five preceding years.
We are, in general, appalling at assessing risk: driving is inherently riskier than flying, terrorists or no terrorists. We also underestimate our chance of divorce, and spend more than is rational on lottery tickets and less than is rational on climate change. We fear our kids being abducted, so drive them to school, ignoring the greater risks that poses to their health and well-being.
You are amazing: The 10 incredible superpowers in every human
Find out how to harness the best and avoid the worst of what you are
How to do better? First, switch off your gut. Psychologists characterise our risk problem as a clash between system 1 and system 2 thinking. System 1 is the product of evolved biases shaped over thousands of years. “If you saw a shadow in the grass and it was a lion and you lived to tell the tale, you’d make sure to run the next time you saw a shadow in the grass,” says Gardner.
Advertisement
This inbuilt fear factory is highly susceptible to immediate experience, vivid images and personal stories. Security companies, political campaigns, tabloid newspapers and ad agencies prey on it. System 1 is good at catastrophic risk, but less good at risks that build up slowly over time – hence our lassitude in the face of climate change or our expanding waistlines.
So when your risk judgement is motivated by fear, stop and think: what other, less obvious risks might I be missing? This amounts to engaging the more rigorous, analytical system 2. People who deal with probability and risk professionally have been found to use system 2 more, among them bookies, professional card players – and weather forecasters. “Meteorologists get a bad rap,” says Gardner, “but they tend to be highly calibrated, unlike most of us.”
“We spend more than is rational on lottery tickets and less on climate change”
These people receive precise, near-immediate feedback about their predictions – abuse for a false weather forecast, or a crucial card trick lost – which helps them constantly recalibrate their risk thermometer. That’s something we can all do. “Choose something specific you want to improve your risk intelligence for,” says , a risk researcher. “What time will your spouse be home tonight? Make bets with yourself. Were you right? Keep track.”
That sounds trivial in the home, but it’s crucial in business. Part of the problem in the run-up to the financial collapse of 2008 was that individuals were no longer accountable for their own actions, says , who studies organisational behaviour at City University of London. “At banks, there was no direct relationship between what you did and the outcome,” says Spicer. “That produced irrational decisions.”
There’s one feature you see over and over in people with good risk intelligence, says Gardner. “I think it wouldn’t be too grandiose to call it the universal trait of risk intelligence – humility”. The world is complex – be humble about what you know, and you’ll come out better.
This article appeared in print under the headline “You are… scared”
