What are the most common mistakes people make in evaluating risk?

We worry about the wrong things: paying too much attention to minor risks and not enough attention to major ones. We don’t correctly assess the magnitude of different risks. A lot of this can be chalked up to bad information or bad mathematics, but there are some general pathologies that come up over and over again.

In Beyond Fear, I listed five:

  1. People exaggerate spectacular but rare risks and downplay common risks.
  2. People have trouble estimating risks for anything not exactly like their normal situation.
  3. Personified risks are perceived to be greater than anonymous risks.
  4. People underestimate risks they willingly take and overestimate risks in situations they can’t control.
  5. Last, people overestimate risks that are being talked about and remain an object of public scrutiny.

Source is Bruce Schneier.

The book mentioned above, Beyond Fear, is definitely worth reading if you are curious about risk or security.

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