Risk

Humans are notoriously bad at judging risks. I’m talking about the decision making process behind actions. We all make hundreds of decisions every day. When do we decide to cross the road? What do we decide to put in our sandwich for lunch? What religion do we choose to follow? Not all these sound like risks, but all decisions to take risks are nonetheless decisions and follow the same decision making process as any other decision. We don’t consider a decision to be a risk when the cost of making the wrong decision isn’t very great. That’s the only distinction between a conventional decision and a risk.

The decision making process is actually pretty straightforward, as I shall demonstrate with my Risk Matrix^TM later. However, there is a substantial amount of judgment to be done, and this is where our human nature allows us to screw up and make the wrong decisions and put ourselves at risk.

Every decision starts with a question: Should I do action X?

Action X might be to cross the road, for instance. Then there are two factors to consider: probability and cost/benefit, both of which can be either positive or negative. These are shown in the Risk Matrix^TM below.

In our road crossing example, there might be few cars on the road so the probability of successfully crossing the road (good outcome; P) will be rather high compared to the probability of being involved in an accident (bad outcome; p). Let’s say you decide that you have a 99% chance of successfully crossing the road. So P = 0.99 and p = 0.01.

Next we need to do some cost-be

nefit analysis. We can assume that there are more benefits of reaching the other pavement than

there are costs. It could be that the supermarket is on the

other side of the street. The benefit is that we can get some bread and milk before going home. The cost is that it’ll take us longer to get home since we’ll have to do the shopping and cross back over the road. But we decide that overall the benefits are greater than the costs, so we assign a net benefit of +1.

On the other hand, there are considerable costs associated with unsuccessfully crossing the road and ending up in an accident. These include injury resulting in time spent at the hospital, preventing you from doing things you would need or want to do. There could be some benefits, such as not having to go to school and hand in your unfinished homework, but overall the costs will outweigh the benefits. Since there is some uncertainty in exactly how bad the accident could be, we’ll assign it an average cost of -100 (it would be worth about 100 shopping trips).

Now in order to determine whether to perform the action of crossing the road, we multiply the cost/benefit by the probability:

(P x b) + (p x c)

If the result is a positive number, then the action is worth making. If the result is negative, then the action should not be taken; it is too risky!

In our example,

(P x b) + (p x c)

= (0.99 x 1) + (0.01 x -100)

= 0.99 - 1

= -0.01

The result is negative and we conclude that in these conditions crossing the road would not be a smart move. Perhaps wait until some cars have gone past and re-evaluate.

However, remember at the start I said that humans are notoriously bad at judging risks? Well this hasn’t changed; the issue is in the values we assign to each part of the equation. If we were drunk we might misjudge the likelihood of succeeding; the road might be busy and we ignore a high probability of collision. Maybe we’re young and innocent and don’t realise the implications of being involved in an accident and misjudge the net cost of a bad outcome.

Sometimes we’re blinded by one impressive value in the Risk Matrix^TM and do not notice the importance of the other values. Here are two examples.

The first is that of the gambler. The question is should he put all his money on red? The benefit of winning is obviously massive. He could walk away with thousands of pounds. So excited is he by this prospect that he ignores the underwhelming probability of him actually succeeding. Coupled with a high cost to failure, he shouldn’t make the gamble, but it can be easy to be blinded by the spectacular benefit of success.

The other example is that of the agnostic. He comes across a religious group that tells him that their god punishes non-belief by eternal suffering in the afterlife. The agnostic may at first question the existence of this god, but the religious group tells him that even if he’s not sure whether or not that their god exists, at least he can avoid eternal suffering by becoming a follower. The question is should I ignore this god? The cost of a bad outcome (that after all this god does exist) is so great that he might ignore to consider the probability of the god existing, which could turn out to be so slight as to mitigate the impressive costs.

If there were to be a moral to this story, it would be to consider all corners of the Risk Matrix^TM when making an important life-changing decision. Always make sure you have a good understanding of both the probabilities and costs/benefits involved.

Science is just a religion

It seems to be a theistic claim common to the intertubes¹ that science is a religion, or atheism takes just as much faith as religion. These are clearly erroneous claims, for a series of reasons that I won’t go into detail on. However, I’m not sure what the point of this argument is in the first place.

Does reducing science or atheism to the status of religion make it less respectable? Does it make them more easily dismissible as opinion? Yes, very likely, and that’s probably why a great number of rational thinkers are offended by statements like these. In fact, this might even be the reason. Theists observe that these claims rile their ‘opponents’ and thus keep using them.

However, the reality is quite alarming. If making science a religion makes it less respectable and making atheism a faith makes it more dismissible, then does that not mean that the theists are calling their beliefs and religions disrespectable and dismissible as ‘just an opinion’? Surely that’s counter to all that they’re trying to achieve?

1: http://xkcd.com/181/, though special admittance to YouTube must also be made here.

Shades of grey

Many people believe in absolute truths. Killing is wrong, God exists, Picasso is beautiful, Frenchmen are more romantic, what goes up must come down. I think that people are learning to believe these through inductive learning. All around them are either examples of these with no exceptions or people telling them these, again with no exception or contradiction.

Later in life, these people may come into contact with realities that contradict their conceived laws of nature; war, atheists, art critics, Italians (only kidding), NASA. If they have lived too long in their bubble, they will twist and contort what they are witnessing to fit their beliefs. Other people are wrong. Argument and hostility may break out. Others less deep will modify their rules, ever adding exceptions. Killing is wrong. Unless God orders it. Whatever goes up must come down. Unless it's a rocket.

Spend too long without these ‘laws’ challenged, it becomes easy to fall into a trap. Subscription to increased doses of absolute truth. Smaller and smaller trends are deemed truths, with heavier and heavier bias. Scrutiny is met with hostility. Life becomes a set of rules too easily created with too many appendices.

An open mind (minds seem to be better opened earlier than later) realises that in an inductive system, an exception breaks the rule, rather than being added to the rule. When confronted with an exception, the open mind attempts to understand what is really going on and rewrites the rules in their entirety in order to maintain stronger congruence.

Under closer scrutiny, the world is much greyer than we assume. It’s all too easy to label things black and white without thinking about it too much. Sometimes it takes one person to come along and shake the box a bit.

Think of sexuality. First there was just heterosexuality. Then homosexuality came out of the closet and we were forced to change the rules. Now a person can be gay or straight. Then bisexuality came along. There is still misunderstanding and hostility towards this even now (remember second and third paragraphs). Some people more open minded have changed the rules to gay, straight or bi. Then more contradictions came along in the form of asexuality and trans-sexuality. Alfred Kinsey came along and shook the box. He told us to stop thinking in terms of absolutes. Don’t categorise when no categories exist.

The world is not to be divided into sheep and goats. It is a fundamental of taxonomy that nature rarely deals with discrete categories... The living world is a continuum in each and every one of its aspects.
- Alfred Kinsey 1948