Risk, Uncertainty and Everything Else

Lately I have been doing a lot of traveling between State College, PA and Washington, DC for meetings and such.  To pass the 3.5-hours minimum driving time each way, I, like many others listen to audiobooks on subjects that excite me.  The following is a list of titles for good audiobooks I listened to that are sure to educate, if not inspire, risk professionals.  Note that I purchased all these books from Audible.com via ITunes.

• Freakonomics, by Stephen D. Levitt and Stephen J. Dubner.  The essence of this book was that everything is governed by incentives.  But, as the author points out in his preface, there really is no coherent theme to the book; it is just a compilation of interesting studies focused on such things as connection between child names and socioeconomic status (imagine someone named Orangejello and Lemonjello, both siblings), the connection between crime and legalized abortion, incentives for drug dealing, and so on.  This book runs about 7 hours in the car, and is between $10 and $20.
• Predictably Irrational: The Hidden Forces that Shape Our Decisions, by Dan Ariely[Prof. Ariely maintains a blog that talks about irrational things he encounters in daily life or hears about from others).  This book basically describes the science of behavioral economicsvia a variety of fun case studies highlighting just how predictable humans are at being irrational.  Prof. Ariely covers such issues as the impact zero cost has on a consumer vice very low cost, say, 0.01-cents.  Also the role of relativity in getting people to do what you want.  For example, envision providing two options to a decision problem that are completely different such that the decision maker cannot make an intuitive judgment call as to which is better.  Lets call them option A and option B.  According to Ariely’s account, if you provide a third option C that is similar, yet inferior, to your preferred option (call it A), then it is very likely that the “decider” will choose the option A since now he is empowered to make an intuitive judgment as to which is better.  That is, because the decision maker can now compare option A with option C on the basis of similarity, he can confidently say A is better than C.  Yet he still cannot make any statement as to whether A or C is better than B.  So, he chooses A.  I wonder what implications this has for risk communication and intelligence briefing…  This audiobook runs about 7 hours, and is between $10 and $20.
• Blink: The Power of Thinking Without Thinking, by Malcolm Gladwell.  We all know that most people aren’t deliberate in their decision making process, especially if they are “experts” in this subjects they are called to task on.  Yet, despite what many people say about how analysis is good, people do surprisingly well by going by first instinct (of course, I would only trust the intuition of someone expert in the domain of which I seek information; in experts I kinda-sorta trust, all others bring sound data and reasoning).  The focus of this book is on those snap judgments that seem to arise from no conscious thought at all.  The author talks about how in some cases more data is not a good thing, particularly if it is irrelevant, non-diagnostic, and so on.  Thin-slicing is an interesting theme that is present throughout much of the book - people tend to make sense of a situation by taking a thin slice of what is going on.  That is, people only pay attention to just a few of the seemingly infinite number of environmental cues to size up a situation or make a judgment about the future.  Of course, expertise allows us to separate the cues that matter from those that don’t.  What worries me, personally, are those decision makers that think they see something going on related to a cue that matters, or perhaps believes that an irrelevant cue has significant bearing on, say, the likeliness of an undesirable future event.  How can intelligence and risk analysts characterize the mental models of their customers so as to tailor intelligence products that helps them correctly size-up a situation while mitigating the effects of erroneous thinking?  Beats me at the moment.  This book runs about 7 hours, and costs between $10 and $20.
• Gut Feelings: The Intelligence of the Unconscious, by Gerd Gigerenzer.  If you like the three books above, this book goes the next step.  I am only half-way through this book, so I will defer commenting on it until later.  But if you are interested in understanding better the science behind gut feelings, intuition, and snap judgment, this book is a good listen.  What does separate this book from the others is its connection to fast and frugal heuristics, which are described in Prof. Gigerenzer’s book Simple Heuristics that Make Us Smart.  As with the others, this book is about 7 hours long, and costs between $10 and $20.

The one thing I noticed from these books is that they cross reference the same published research.  So, while these studies have been peer-reviewed by numerous scholars and are well respected, be mindful of systematic bias… (but in this case this bias is a good thing since it is supported by sound science).

One last point - I liked these titles so much that I actually purchased a hard copy of each for handy reference.  Perhaps you will like them as much as I.  Happy listening!