5 Rules of Risk

July 14, 2020


The 5 Rules of Risk dives deep into the concept of risk and how accurately humans evaluate it. Humans are subconsciously always evaluating risk on autopilot for every decision we make, whether we are aware of it or not.

Let’s compare driving a car to mountain biking. More people avoid mountain biking than driving a car, so you would think that is the more dangerous activity.

The riskier behavior is actually driving a car, NOT mountain biking. Your odds of dying while driving a car are one in six hundred, compared to mountain biking which is one in THIRTY THOUSAND.

Why do we get risk evaluation SO WRONG? Ingrained in our brains are flawed processes for assessing risk, but if you can keep these rules in mind, it will be harder for you to be led astray by your faulty human risk evaluation system.

Rule 1 – Voluntary risks are more acceptable than involuntary risk. The perception of choice is powerful. Giving people choices on how to reduce risk can lead people to tolerate the riskier choice. People can be far more tolerant of risks they can engage in regularly (like driving a car) compared to ones they don’t (mountain biking).

Rule 2 – Acceptance is inversely proportional to prevalence. The more people who are exposed to a certain risk, the more the public will accept it. More people travel by plane than travel to space, so we couldn’t accept the same level of risk of space travel if that same risk was inherent in air travel.

Rule 3 – Disease is a yard stick. Humans have accepted the likelihood death at the hands of disease, so anything riskier than dying from disease appears to be absolutely unconscionable.

Rule 4 – Novelty increases perceived risk. We fear what is new and not understood. As your understanding of a topic goes down, the perceived risk of that topic (or activity) goes up. Ex. Nuclear power is ranked as the one of the most risky activities according to the public, but by experts it was ranked 20th and driving a car was ranked #1.

Rule 5 – Numbers are numbing. Humans can’t comprehend mass tragedy through statistics, so they aren’t an effective way to communicate risk to people. This is why people tolerate large scale disasters and mass casualty events compared to small terrorist attacks. People make decisions based on emotion and justify with logic (i.e. numbers).