Economists have spent decades modelling risk as a quantity. It behaves more like a weather system. Every one of us runs the same shortcut, and every one of us believes we are the exception. The usual story is that we are careless calculators. The better story is that we are careful about the wrong things. Notice how rarely anyone is argued out of the free sample, and how often they are simply moved past it by a change in circumstance.
What it gets right
The usual story is that we are careless calculators. The better story is that we are careful about the wrong things. Economists have spent decades modelling risk as a quantity. It behaves more like a weather system. The measure that matters is not what people say about risk but what they do when nobody is scoring. The evidence here is thinner than the confident commentary suggests, and the honest position is a shrug with a direction of travel.
