People, in general, are terrible at making risk assessments.
They tend to underemphasize important risks and make decisions that affect their long-term prospects and overthink minor risks and miss out on opportunities.
How many people put off saving for retirement through their 401K program to the detriment of their long-term goals (undervaluing risk) but at the same time will avoid starting that business when they first leave college (overthinking minor risks).
There is where thinking in bets comes into play. If you can think through your decisions like you would think through playing a hand in poker you can calculate expected value.
If the expected value were to exceed the initial costs then this is the right decision to make. Even if the outcome was not the one we preferred we can rest assured the decision was the right one to make.
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