Decisions

Risk Savvy: 6 key ideas

by Gerd Gigerenzer

The core ideas of Risk Savvy, each in under a minute, written in our own words. Want the full depth? Get the book.

1. IDEA 1 OF 6

   Risk versus uncertainty

   Risk is when probabilities are known, like a lottery.

   Uncertainty is when they aren't. Statistics help with risk; simple rules often work better under uncertainty.

2. IDEA 2 OF 6

   Use natural frequencies

   Say "1 in 100" instead of percentages.

   Frequencies make risks easier to understand.

3. IDEA 3 OF 6

   Defensive decisions

   People often choose options that protect themselves from blame rather than the best ones.

   Notice it in yourself and your organisation.

4. IDEA 4 OF 6

   Simple rules can win

   Heuristics can outperform complex models when the future is uncertain.

5. IDEA 5 OF 6

   Question statistics

   Ask what the number really means and what it's compared to.

   Relative risk can mislead.

6. IDEA 6 OF 6

   Teach risk literacy

   Understanding risk improves decisions about health, money and safety.