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Risk Savvy: How to Make Good Decisions

4.06  ·  Rating details ·  1,286 ratings  ·  142 reviews
An eye-opening look at the ways we misjudge risk every day and a guide to making better decisions with our money, health, and personal lives

In the age of Big Data we often believe that our predictions about the future are better than ever before. But as risk expert Gerd Gigerenzer shows, the surprising truth is that in the real world, we often get better results by using
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Hardcover, 336 pages
Published April 17th 2014 by Viking (first published March 18th 2013)
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 ·  1,286 ratings  ·  142 reviews


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Tevfik
Jun 16, 2017 rated it it was amazing  ·  review of another edition
I was in favor of Kahneman & Tversky ecole, a branch of bounded rationality called "cognitive biases and heuristics" until I read this book. Now I am noticed that there is another point of view called "fast and frugal heuristics", led by Gerd Gigerenzer. This book partially explains this approach, which shows that some rule of thumbs relying on heuristics may perform better than a complex strategy suggested for a problem. I have also become aware of demarcation between risk and uncertainty by re ...more
Ha Thu
Feb 09, 2017 rated it it was amazing  ·  review of another edition
I live in Japan and work for a global company. At every 6 months or so I would receive a notice from both the company and the ward office of where I live in, calling for breast cancer free check up that are held on regular basis.
I never go for it, feeling that the earlier I find out about anything like breast cancer, the less happily I could live the rest of my life. If the cancer were there, it were there, medical intervention would not do much help with serious illness like that, so why ruinin
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Jeff
Mar 05, 2014 rated it really liked it
Recommends it for: Anybody who wishes to understand how to best assess risk
The version of the book I read had the following notation: "Advanced uncorrected proofs - not for sale." Of course I can only comment on that version, and not on the final copy.

I received this book for free through Goodreads First Reads.

This book is hard to rate objectively. Any assessment will be based at least partly on the level of desire the reader might have to wade through some fairly complex calculations. (In certain situations, Mr. Gigerenzer promotes the "simpler is better" theory whic
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Andy
Nov 13, 2018 rated it it was ok  ·  review of another edition
A high level discussion that tends to use substantially more words than are necessary to get the point across. Written like most business books where you get a kind of vague point, followed by an anecdote, and maybe a slightly better explanation of the point. My bigger issue is that Gigerenzer dismisses the idea put for by Kahneman, Tversky, and others without honestly engaging with them. Kahneman's and Tversky's idea, as identified in Thinking Fast and Slow does not say that intuition is always ...more
Jafar
May 05, 2014 rated it liked it
"GET SCREENED NOW! Early detection saves lives. The 5-year survival rate for breast cancer when caught early is 98%. When it's not? 23%."

Actually, there's no evidence that screening for breast cancer, or any other type of cancer, saves lives. So is Komen lying about the statistics? No. But did you notice that they're talking about "5-year survival rate," not mortality? 5-year survival rate is meaningless because it's distorted by lead-time bias. Don't know what lead-time bias is? Read this book
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Akim McMath
Jan 06, 2015 rated it it was amazing
H. G. Wells once predicted that “statistical thinking will one day be as necessary for effective citizenship as the ability to read and write.” Many decades later, we are as clueless about risk as ever—and at a heavy price. Ignorance about risk lies behind innumerable contemporary problems, from the rising cost of healthcare to the recent global financial crisis. In Risk Savvy, Gerd Gigerenzer seeks to change that. Not only does this book demonstrate how and why we fail to understand risk. It al ...more
CaptainWolfsborg
Oct 11, 2018 rated it really liked it
There are numbers of good books about risk, and I would like to place Gigerenzer's "Risk Savvy" into this category. Need to admit, I wasn't at all interested in it when it appeared in the bookshelves. I was thinking I wouldn't have time for yet another book on Risk, but when I heard that he argues against Kahneman and Tversky, it caught my interest. It's a tall order to question the school of Kahneman and such a bestseller as "Thinking, fast and slow". However, it is always worth to have a contr ...more
Thomas Edmund
Aug 22, 2020 rated it it was amazing
Risk Savvy is an unusual but helpful tome on risk assessment in a modern world. Gigerenzer skewers several topics, pretty broadly from terrorism, to cancer screening all linked with an overall focus on making accurate, useful and evidence based decisions.

At the moment I have a slightly cynical perspective on my non-fiction, judging books heavily on whether they fit with the shitshow that is 2020, and Risk Savvy passes the test! In fact I think this book is quite useful reading to help make sens
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Sameer Alshenawi
Eye opener .
It addresses risk vs uncertainty , and how often we mistakingly think that risk is unceratinity and uncertainty is risk. It advocates use of rules of thumb or simple ones instead of the sophistaced systems of risk management.
We need educating people in health, financial, and digital risk literacy.

Highly recommended
Adrian
Jan 31, 2017 rated it really liked it  ·  review of another edition
I am constantly afraid of making wrong decisions. I hate it when there is no way to tell if my choices are leading where I want. Therefore I often try to get even the smallest pieces of information before making my choice, balancing carefully out every detail.
...
Turns out it is not the right way to do things. More information does not always give more certainty, as Gigerenzer argues in his book using good examples, clear statistics and simple math. In this world, ever more complex, we must know
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David Hammond
May 22, 2014 rated it it was amazing

Essential information for anyone receiving medical treatment

An introduction to understanding risk - particularly in medicine. For example - a woman has a positive mammogram for cancer - what is the probability she actually has cancer? 8 in 10, 1 in 10 or 1 in 100?

The answer is 1 in 10. How many gynecologists answered this question correctly? Only 21 percent chose 1 in 10.

The author details how pharmaceutical companies and health providers exaggerate the benefits of their products and play on our
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Kevin
Mar 23, 2015 rated it really liked it
This was a book that I thought was amusing, not fantastic, and then overall came around to thinking it was pretty good. Overall, Gerd Gigerenzer talks about how we often make decisions based on a misunderstanding of the data and that we need to do a better job of being what he calls being “risk literate.”
In the first part, he talks about how people internalize a risk if a lot of things happen at once (like 9/11 attacks) where there is a low probability of catastrophe, but that people don’t al
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Emma Veitch
Jul 02, 2017 rated it liked it
Somewhere between 3 and 4 stars. I did really, really enjoy this book but it wasn't quite the all-encompassing mind-exploding stream of consciousness brilliance that I hoped it would be. I think that the author (GG) is absolutely bang-on on pretty much everything, but a few little bits and pieces got lost in translation. Perhaps, it was too "popular" for me and I might have appreciated more detail, more depth on some of the threads he explores. I also felt overall the book was a bit "bitty". The ...more
Michelle
Mar 31, 2018 rated it liked it
Shelves: 2018, non-fiction, workish
Good overview of common sense decision and risk taking principles. Chapter 6 about leadership and intuition was valuable to understand some of the cray decisions I’ve seen taken in my career. Suggest skimming this and honing in on chapters of interest to you.
Anne (ReadEatGameRepeat)
I think this was an interesting read, but since I read his other book, Reckoning with Risk, earlier this year I didn't get as much from it as I thought I would. The author recycles a lot of his points and facts, so it didn't bring many new things as I thought it would. ...more
Benjamin Williams
Nov 28, 2020 rated it really liked it
I’d give this book a 3.5 if I could. First third, great read and info that I found highly applicable. Second third, used the definitions and made the understandable. Last third, I think he has a vendetta against the healthcare industry and sets out to disprove many screenings and preventive medicine and procedures. Not bad stuff, just seemed pretty biased.
Jeff Whitlock
Sep 10, 2017 rated it really liked it
I love the main point of this book: that an answer to building a better modern society does not lie in paternalistic governments that treat people as "stupid," but in helping people make better decisions through understanding risk and uncertainty.

I love Gigerenzer's vision of educating people in health, financial, and digital risk literacy.

While I understood that people are generally "risk unsavvy" (e.g., people won't let their children swim in the ocean for fear of sharks but will let their 16-
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Joseph
Apr 05, 2014 rated it it was amazing
Shelves: non-fiction
This is an excellent book that should inspire healthcare and financial consumers they can understand the jargon of specialists. Rather than making people feel insecure or stupid, Gigerenzer, like all the best teachers, shows patience and gentle encouragement that seemingly opaque statistical jargon can be unpacked and understood even by elementary school children depending on how information is communicated. Bayesian probability is converted to natural frequency using pictorial icons that allow ...more
Julie
Feb 18, 2014 rated it it was amazing
Shelves: first-reads
A First Reads win!

I absolutely loved this book. Although the subject of risk literacy is potentially both dry and confusing (e.g. knowing the difference between relative risk vs. absolute risk), the author presents it in such a way that it is neither. In fact, it is fascinating and easy to understand. (While the author simplifies concepts to make them understandable, there is never a tone of condescension.) More importantly, what he has to say is crucial, IMHO, to changing the trajectory of our
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Bartley Sharkey
Oct 16, 2016 rated it it was amazing
I picked this book up at least a year ago and put off reading it until now because it had the look of a typical business compilation of specific examples that would be vaguely interesting but not very applicable to the everyday. Thankfully I was totally wrong in that view and what I got instead was an accessible, practical and ultimately satisfying read from an author who clearly has a chip on his shoulder about the mis-information that's floating around, causing individuals and governments to w ...more
Scott Oney
Disclaimer: I received this book from a Goodreads giveaway.

I wasn’t searching for a book on how to make decisions, but this book found me. The book covers a lot about innumeracy (the inability to think with numbers) and statistical innumeracy (the inability to think with numbers that represent risk). As a person who likes math and statistics, I found this very interesting.

In the first chapter, Gigerenzer talks about the “pill scare” in Great Britain where the UK Committee on Safety of Medicines
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Rachel Blom
Jun 04, 2014 rated it it was amazing
It's not often you can say that you're really glad you've read a certain book, but it was the case with Risk Savvy. I expected it to be more about decision making in general (which also would have been interesting, I'm sure), but instead the author offers fascinating insight into heuristics and the use of statistics.

Take this example: There's a 30% change of rain tomorrow. Do you know what this actually means? If you do, this book may be a waste of time for you. But if you're not sure what the
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Justin
Mar 30, 2014 rated it it was amazing
Shelves: own
I won this book in a goodreads giveaway. This book was pleasantly different than I expected. I was expecting something about the psychology of risk taking, but instead found a book describing how to best take and communicate risks. The book talks in depth about how many predictions fail because they assume all of their variables are known. The book gives simple rules of thumb and a general technique that actually work in real world situations containing unknowns. The author was understandable an ...more
Miklos
Feb 14, 2017 rated it really liked it
It doesn't always flow smoothly, but it's still an immense and thorough guide to help you think better about risk and probability. You'll never look at the medical information or investment advertisements the same way again. Must read for every adult. ...more
Fred Rose
Sep 21, 2014 rated it liked it
Be good at math, ask skeptical questions, have rules of thumb. Yep, any engineer could tell you that.
Nv
Feb 24, 2021 rated it liked it
A strikingly relevant read for the hysterical Covid world. Wanted a humanistic antidote to the traditional behavioral economist view of life and GG’s articles were most closely aligned with a perspective I wanted. This particular book might not be the best entry point though, it’s clearly meant for mass consumption and goes into no detail at all. Still, his philosophy of risk, intuition and errors in decision making comes out clearly, and it’s refreshingly old-school, in a world that’s quite clu ...more
Pelle
Jul 15, 2017 rated it it was amazing  ·  review of another edition
This is a very good book about common misconceptions in understanding risks in everyday life as well as decision theory.
People are persuaded to undertake medical screenings without any additional benefit, because the underlying probabilities of studies are misunderstood by doctors. The finance industry gives consistently wrong projections of future market prices, nevertheless many people trust them their money. Gigerenzer shows that having no screening at all or invest your money yourself by ap
...more
Lisa Cromwell
Jun 17, 2017 rated it really liked it
This review has been hidden because it contains spoilers. To view it, click here.
Thomas
Sep 10, 2019 rated it liked it
Shelves: science, 2019
I think just about everyone could benefit from reading the second chapter (on the difference between risk and uncertainty - I don't have the math skills to enter into the more academic aspect of the debate, but it seems like a meaningful and true distinction in a world of real decisions) and the chapters on financial and medical decision making. The other chapters are a little more hit and miss, I think. From my layperson's perspective, one way to think about how to situate this book would be th ...more
Richard Meadows
Oct 19, 2020 rated it really liked it
Remember all the popular behavioural economics research on how we’re all hopelessly biased and irrational? Gerd Gigerenzer is not a fan. He might sounds like a fictional villain invented by J.K. Rowling, but he’s the real-life nemesis of Daniel Kahneman and friends.

Gigerenzer argues that our ‘fast and frugal’ heuristics are often superior for decision-making, that intuition serves us very well indeed, and that too much information makes us worse off in conditions of uncertainty.

Risk Savvy is mos
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Gerd Gigerenzer is a German psychologist who has studied the use of bounded rationality and heuristics in decision making, especially in medicine. A critic of the work of Daniel Kahneman and Amos Tversky, he argues that heuristics should not lead us to conceive of human thinking as riddled with irrational cognitive biases, but rather to conceive rationality as an adaptive tool that is not identica ...more

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