Sophia Mora

September 2, 2016
Risk Savvy: How to Make Good Decisions by Gerd Gigerenzer.
Gigerenzer uses an entertaining mix of stories and examples to support his claim of a risk
illiterate society. He argues that people often over-estimate the grandeur of certain risks and put
blind faith in risk models that offer a false sense of certainty. The book offers strategies on how
to approach risky situations and become risk savvy. After reading Risk Savvy, I feel more
prepared to approach decisions I make on a daily basis, decisions ranging from what to choose
on a restaurant menu to what to be afraid of.
While reading Risk Savvy, I worked as a marketing intern with BBVA Compass, a large
sunbelt bank. Gigerenzer devotes a whole chapter to banks historical reliance on complicated
models to predict scenarios in high uncertainty. One manager shared with us the increasing threat
of higher costs due to higher regulatory restrictions; I think he would much rather work in rules
of thumb than devote millions of dollars to developing often irrelevant forecast systems. Banks
can benefit by focusing on the easy rules discussed in Risk Savvy.
The health care industry was also under fire by Gigerenzer. He listed example after
example of how probabilities and test results have been misunderstood by doctor and patient.
The most shocking thing about this discussion was how it seems preputial how doctors dont
know and arent being taught because of a broken system Gigerenzer calls SIC syndrome. My
M.D. brother-in-law and his family of doctors agree and are frustrated everyday by defensive
medicine (a.k.a. the threat of being sued). They did argue that med schools are adding more
statistics classes to help the innumeracy epidemic.
Overall, Risk Savvy was a book full of useful tools and relevant examples. As a soon-tobe new college graduate, I look forward to using the books insights in my approaching big life
decisions.