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Risk
Definitions of riskHistorical backgroundRisk vs. uncertaintyInsurance and health riskInsightIn businessRisk sensitive industriesIn public worksRegretFramingFear as intuitive risk assessmentRisk assessment and management
Definitions of riskHistorical backgroundRisk vs. uncertaintyInsurance and health riskInsightIn businessRisk sensitive industriesIn public worksRegretFramingFear as intuitive risk assessmentRisk assessment and management
Fear as intuitive risk assessment
For the time being, people rely on their fear and hesitation to keep them out of the most profoundly unknown circumstances.In ''The Gift of Fear'', Gavin de Becker argues that "True fear is a gift. It is a survival signal that sounds only in the presence of danger. Yet unwarranted fear has assumed a power over us that it holds over no other creature on Earth. It need not be this way."
Risk could be said to be the way we collectively measure and share this "true fear"—a fusion of rational doubt, irrational fear, and a set of unquantified biases from our own experience.
The field of behavioral finance focuses on human risk-aversion, asymmetric regret, and other ways that human financial behavior varies from what analysts call "rational". Risk in that case is the degree of uncertainty associated with a return on an asset.
Recognizing and respecting the irrational influences on human decision making may do much to reduce disasters caused by naive risk assessments that pretend to rationality but in fact merely fuse many shared biases together.