Sunday, August 31, 2008

Estimating risk

Humans are not very good at estimating risks. Our life seems to be more focused on estimating medium size risks such that we need to avoid every day. Small risks can be seen as unproportionally big, or big risks can be seen as negligible.

Risk of events occurring more or less frequent is seen out of proportion. A risk occurring with low frequency will however be common if the number of possible situations where the risk can occur is very big.

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