Nudges for Unrealistic Optimism

Nudges for Unrealistic Optimism

Our society makes fun of the unrealistic optimist all the time, but the reality is that most of us are unreasonably optimistic in many aspects of our life. We might not all believe that we are going to receive a financial windfall this month, that our favorite sports team will go from losing almost all … Continue reading Nudges for Unrealistic Optimism

The precautionary principle in governance

A Factor for Paralysis in Regulation & Legislation

A common complaint today in the United States is that nothing gets done. We are frustrated by political leaders who can't pass important legislation. We dislike how slow local governments are to update infrastructure, adopt new technologies, and make improvements in the places we live. Gridlock has become the norm, and the actions that governments … Continue reading A Factor for Paralysis in Regulation & Legislation

Risk Averse and Risk Seeking - Joe Abittan

Risk Averse and Risk Seeking

I would generally categorize myself as somewhat risk averse, but studies from Daniel Kahneman in Thinking Fast and Slow might suggest that I'm not really any different than anyone else. I might just be responding to the set of circumstances that I typically experience, similar to anyone else, and I might just be more aware … Continue reading Risk Averse and Risk Seeking

Desperate Gambles

Desperate Gambles

Daniel Kahneman worked with Amos Tversky to develop many of the concepts that today create the principle of Prospect Theory. Many people are familiar with the psychological and economic principle of Game Theory, and Prospect Theory is a similar psychological and economic theory of how people behave when faced with uncertainty. In his book Thinking … Continue reading Desperate Gambles

Avoiding Gambles

Avoiding Gambles

"Most people dislike risk (the chance of receiving the lowest possible outcome), and if they are offered a choice between a gamble and an amount equal to its expected value they will pick the sure thing," writes Daniel Kahneman in Thinking Fast and Slow. I don't want to get too far into expected value, but … Continue reading Avoiding Gambles

How We Chose to Measure Risk

How We Chose to Measure Risk

Risk is a tricky thing to think about, and how we chose to measure and communicate risk can make it even more challenging to comprehend. Our brains like to categorize things, and categorization is easiest when the categories are binary or represent three or fewer distinct possibilities. Once you start adding options and different possible … Continue reading How We Chose to Measure Risk

Probability Judgments

Probability Judgments

Julia Marcus, an epidemiologist at Harvard Medical School, was on a recent episode of the Ezra Klein show to discuss thinking about personal risk during the COVID-19 Pandemic. Klein and Marcus talked about the ways in which the United States Government has failed to help provide people with structures for thinking about risk, and how … Continue reading Probability Judgments

The End is Always Near

The End is Always Near

The human mind thinks in narratives. Well take in information about the world around us, and we create a story that weaves all of those narratives together in a cohesive manner. The mind creates the reality that it experiences, and it uses narrative to give the story meaning. Unfortunately, sometimes the stories don't fit the … Continue reading The End is Always Near

Buying Insurance

We Don’t Buy Insurance for Ourselves

Why do we buy insurance of any kind? Is it really for ourselves and our own benefit, or is there something else going on with insurance decisions? According to┬áVenture Capitalist Chris Brookfield, as quoted in Dave Chase's book The Opioid Crisis Wake-Up Call, there is something beyond our own self interest at play when we … Continue reading We Don’t Buy Insurance for Ourselves