Risk Savvy: How to Make Good Decisions Kindle Edition

Risk Savvy is a book in the behavioral economics & decision making genre. Other books in this genre include Thinking Fast and Slow, Predictably Irrational, the Signal and the Noise, works of Nassim Taleb. The book is a distillation of the author's extensive research & consulting experiences. It's very well written. It has a lot of interesting anecdotes and sound advice. It's fun and informative.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.

I read and was impressed with the author's book 'Gut Feelings'. This book was a total disappointment becausethe material was almost the same. Different organization, mixed with some different stories but basically thesame material as with the other book. So if you read one book you do not need to read the other. Between the two I recommendthe other book. This book was like a collection of articles about the subject randomly put toghether without any architecture andintegration into a whole. I got the feeling that either publisher tried to make a quick buck or the author tried to proliferate his numberof 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 withhigh 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'.

This book contains most valuable information, but it is largely a regurgitation of Gigerenzer's earlier book, Calculated Risks. Risk Savvy is not as well organized as Calculated Risks, but it is similarly repetitive. As in Calculated Risks, he explains the difference between risk and uncertainty, teaches the important of presenting risk in terms of reference classes and natural frequencies (instead of percentages or fractions), and uses such examples as medical tests. Many of the examples or even quotes he uses are the same. The novel information in Risk Savvy is about decision-making under uncertainty. He argues that intuition and/or simple rules of thumb are often more useful than complicated decision-making strategies (when risks are unknown and there is much uncertainty, etc.). He explains under what conditions intuition or simple rules of thumb are preferable, and he provides useful arguments and examples in such areas as investing and choosing a meal at a restaurant. This book could have been a couple of additional chapters to Calculated Risks, not a whole new book.

There are two main points made in this book.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.

Excellent, a fascinating, enjoyable and easy read. Although a few reviewers found it a bit repetitive, I actually enjoyed his numerous examples; while they may not be essential to making his core points, I think readers will gain some fascinating insights into the reality of healthcare.. The insights into the harms and lack of benefits of most routine screening should be far more widely understood, and like the author I've come across the lack of awareness of the harms of screening (eg over-detection) and the misunderstanding of the relevance of five-year survival rates vs mortality rates (early detection bias) among doctors, not to mention the majority of the lay population. I'd highly recommend this book, not just for its core points about risk, but also for the healthcare insights.

It's obvious, isn't it, that the more we know the better our inferences will be? No, says Gerd Gigerenzer, it doesn't always follow. What we take to be knowledge is usually limited to the conscious variety. We are unaware of the vast reservoir of unconscious knowledge which we can access, and which is the source of gut feelings and intuitions.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.

I'm sorry to give only 2 stars but this book should actually be an essay or long article rather than a long book. There's a lot of repetition and 'filling' in order to make it book-size and I'm afraid I just don't want to read the same thing over and over again. The author has good ideas and I understand that he wanted to write a book but wouldn't it be better to get to the point and explain to us the ideas in a quarter of the time. I wouldn't be averse to paying the same amount of money for a much shorter book.

One of my favourite books ever. This is a rather short but impactable book on how humans make decisions and how external forces impact the way we think. The author conveys a message of clarity in our thoughts in the midst of all the foginess by certain outlets. Its very informative and uses real world views to convey thoughts-with a hint of humour scattered everywhere.