- Hardcover: 336 pages
- Publisher: Viking (April 17, 2014)
- Language: English
- ISBN-10: 0670025658
- ISBN-13: 978-0670025657
- Product Dimensions: 6.4 x 1.1 x 9.2 inches
- Shipping Weight: 1.2 pounds
- Customer Reviews: 167 customer ratings
- Amazon Best Sellers Rank: #528,796 in Books (See Top 100 in Books)
Risk Savvy: How to Make Good Decisions Hardcover – April 17, 2014
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The core thesis of the book is that heuristics are powerful. Why? For one, they deal with noise (& overfit!) extremely well, which is abundant in modern life. Two, in domains where we know little, a heuristic may give you expert-level performance. The author even suggests developing correct heuristics is essentially what an expert does! So, as an individual, if you work on refining the heuristics you follow, you can make better decisions in life. The book is full of examples and suggestions for various domains.
Regarding content, the section on health care was an eye-opener for me. Comparing the medical industry with the financial industry, exposing the statistical illiteracy of doctors & incentives are truly revealing regarding what's wrong with the US health care system. Most important message? Put test results in statistical context. Don't get overtested to avoid the problem of false positives & unnecessary treatments. This book will likely change the way you seek health care.
The author's thoughts regarding teaching risk literacy to wide swathes of population are commendable. Decision making, though extremely important, is a skill few of us master. I highly recommend Risk Savvy and the other mentioned works to those who want to make better decisions.
PS: I'd like to thank the author for writing a popular book that plays the devil's advocate against the skeptics of human rationality. After reading his arguments, I'm convinced that human beings aren't necessarily irrational, rather we're untrained to make sound decisions in a complex world. This book provides that kind of training.
the material was almost the same. Different organization, mixed with some different stories but basically the
same material as with the other book. So if you read one book you do not need to read the other. Between the two I recommend
the other book. This book was like a collection of articles about the subject randomly put toghether without any architecture and
integration into a whole. I got the feeling that either publisher tried to make a quick buck or the author tried to proliferate his number
of books in a 'fast and frugal' way. Maybe the 'rule of thumb' is that all that do not matter much for the majority. I am surprized with
high recommendations written about this book, and than again I am a little bit suspicious about the sincerety of these reviewers!
I wish I never read this book and maintained a very high level of impression about the author which I had after reading the 'Gut Feelings'.
Top international reviews
Firstly, you need to use a different reasoning process about situations where you know the risks and their odds, and the uncertain situations where you don’t; and you need to be able to distinguish these cases. In the case of uncertainty, rules of thumb are usually better than trying to calculate unknown odds. Gigerenzer gives some examples. I particularly liked his discussion of the real Monty Hall problem, rather than the “tidied up” version used for probability calculations. The real situation is much messier, and I have pointed out that you need to know the full rules beforehand: the stated solution works only if the host doesn’t cheat.
Secondly, even when the odds and risks are known, most statistics are so badly presented, possibly to make better headlines, that even the experts don’t understand what they say; you need to look at the real underlying rates. Behaviour X doubles the chance of cancer Y may not be a problem, if the chance of cancer Y is extremely small in the first place. Gigerenzer gives examples of a way to present rates rather than conditional probabilities that makes it much easier to see and understand the true risks.
There are many good cases discussed in here, with a large chunk of the book given over to healthcare. For example, there is a lot about medical screening, false positives, and increased “survival” rates being due entirely to earlier diagnosis, and nothing to do with living longer in total if diagnosed earlier (“lead time bias”). Survival rates are different from mortality rates.
Some of the discussions do feel a little disjointed. In particular, there is early emphasis on how most real world issues deal with uncertainty (rules of thumb) rather than risk (calculating odds), yet much of the book is on increasing statistical literacy. No matter; there is much good material in here.
Successful managers base all their decisions on reason, or so we have been led to believe. Wrong again, says Gigerenzer. Although they are reluctant to admit it, the higher up the hierarchy managers are the more likely they are to rely on gut feelings.
So why do many of us make bad decisions? Because we have not been educated to understand risk. We are unable to distinguish between between known calculable risks and uncertainty. We are very uncomfortable with uncertainty, preferring to accept the illusion of certainty offered to us by people in authority. The hunger for certainty is what prevents us from being risk savvy.
Heuristics are smart rules of thumb which can simplify decision making. They can be safer and more accurate than a calculation, yet are frowned upon by many. This book gives examples of heuristics ranging from the gaze heuristic of pilots to the aspiration rule which can prevent us wasting time and feeling restless and dissatisfied when shopping.
This is a book which encourages us to take more control of our lives. It allows us to see when we are being offered second or third best solutions because someone feels it necessary to engage in defensive decision making. Although it does contain repetition, it is a book well worth the time taken to read it.
Don't blandly accept what your are told by medical professionals, especially if they do not provide you with clear reasoning as to why they are reccomending a specific type of treatment.
The author makes clear that depending how the material is being presented, chances and risks can easily be evaluated correctly by most people, and even young schoolchildren can properly assess risks once the material is presented in the right context. It teaches the layman how to transform confusing percentage wise risks and chances into hard numbers that may make more sense for those with little mathematical experience.
The author also makes people aware of the presentation of completely misleading information (not necessarily wrong, but absolutely putting someone on the wrong footing). Being aware of that, one may be in a better position to ask the right question(s) to the people or institutions tag present you with this misleading information. Highly recommended!
There's a good section on understanding probability, and useful summaries in the form of tips for readers.
It sits next to the more scholarly "Risk" by John Adams and the more popular-style of Dan Gardener's "Risk: The Science and Politics of Fear". All three have a similar central theme, and are worth the investment of reading and understanding.
Having personally experienced the impact of complex medical advice and seen how often statistics are misused in business the message that understanding risk better matters really resonates.
Some nice simple tools to use as well
All in all worth the read
The author puts forward his research clearly and concisely. It's has lots of quotes from famous people to emphasise the messages, so it's entertaining too.