51. Cognitive biases in risk management – Neglect of probability – Alex Sidorenko

The neglect of probability, a type of cognitive bias, is the tendency to completely disregard probability when making a decision under uncertainty and is one simple way in which people regularly violate the normative rules for decision making. Small risks are typically either neglected entirely or hugely overrated. The continuum between the extremes is ignored. The term probability neglect was coined by Cass Sunstein.[1]

There are many related ways in which people violate the normative rules of decision making with regard to probability including the hindsight bias, the neglect of prior base rates effect, and the gambler’s fallacy. However, this bias is different in that rather than incorrectly using probability, the actor completely disregards it.

https://en.wikipedia.org/wiki/Neglect_of_probability

Example: Susan and Jennifer are arguing about whether they should wear seat belts when they ride in a car. Susan says that you should. Jennifer says you shouldn’t… Jennifer says that she heard of an accident where a car fell into a lake and a woman was kept from getting out in time because of wearing her seat belt, and another accident where a seat belt kept someone from getting out of the car in time when there was a fire. What do you think about this?

 

 

Help spread the messages in this guide by sharing it with your colleagues  https://www.researchgate.net/publication/323254437_GUIDE_TO_EFFECTIVE_RISK_MANAGEMENT_30

More information about RISK-ACADEMY, our training courses and services at www.riskacademy.blog

Advertisements

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

RISK AWARENESS WEEK 2019 broadcasted online at https://2019.riskawarenessweek.com from 14 to 18 October 2019