Managing Risk: How to Make Better Decisions

Before the autumn of 2008, what did Thanksgiving turkeys and rating agencies have in common? They assumed that stability was increasing, and then they were blindsided by Doomsday. Thanksgiving turkeys were used to being fed every day, and suddenly they were taken to the chopping block. Much like Wall Street. Rating agencies and top managers of major banks never saw the crash coming. Dodge the chopping block. Learn to tell the difference between stability and false stability.

In the latest installment of Big Think Edge, psychologist Gerd Gigerenzer explains how to analyze risk. The author of Risk Savvy: How to Make Good Decisions, Gigerenzer teaches this exclusive workshop, where he stresses understanding the critical difference between calculable risk and uncertainty.

“The problem here is that mathematical models that are made for a world of known risk, like probability theory, are applied to a world of uncertainty,” explains Gigerenzer. “And here one doesn’t know whether they work or not. But nevertheless the dream to calculate everything in advance is very strong.”

Learn the guiding principles for analyzing risk to make better decisions in a world of uncertainty. Sign up for a 14-day trial to Big Think Edge and receive free access to online study guides and video lectures from leading experts.

For more on Gigerenzer’s insights on managing risk, watch this clip from Big Think Edge:

LinkedIn meets Tinder in this mindful networking app

Swipe right to make the connections that could change your career.

Getty Images
Swipe right. Match. Meet over coffee or set up a call.

No, we aren't talking about Tinder. Introducing Shapr, a free app that helps people with synergistic professional goals and skill sets easily meet and collaborate.

Keep reading Show less

In a first for humankind, China successfully sprouts a seed on the Moon

China's Chang'e 4 biosphere experiment marks a first for humankind.

Image source: CNSA
Surprising Science
  • China's Chang'e 4 lunar lander touched down on the far side of the moon on January 3.
  • In addition to a lunar rover, the lander carried a biosphere experiment that contains five sets of plants and some insects.
  • The experiment is designed to test how astronauts might someday grow plants in space to sustain long-term settlements.
Keep reading Show less

A world map of Virgin Mary apparitions

She met mere mortals with and without the Vatican's approval.

Strange Maps
  • For centuries, the Virgin Mary has appeared to the faithful, requesting devotion and promising comfort.
  • These maps show the geography of Marian apparitions – the handful approved by the Vatican, and many others.
  • Historically, Europe is where most apparitions have been reported, but the U.S. is pretty fertile ground too.
Keep reading Show less

Love in a time of migrants: on rethinking arranged marriages

Arranged marriages and Western romantic practices have more in common than we might think.

Culture & Religion

In his book In Praise of Love (2009), the French communist philosopher Alain Badiou attacks the notion of 'risk-free love', which he sees written in the commercial language of dating services that promise their customers 'love, without falling in love'.

Keep reading Show less