Calculating risks and living with them.

When Benjamin Franklin wrote on the eve of the French Revolution that “nothing in life is certain except death and taxes”, he was using irony to highlight the fact that, for humans, everything runs the risk of an uncertain outcome. However, we do not like dealing with this uncertainty and anxiously look for guarantees that simply do not exist. This, in turn, influences our perceptions and decisions we make every day – and often leads to serious errors of judgement.

Gerd Gigerenzer and his team at the Max Planck Institute for Human Development and the affiliated Harding Center for Risk Literacy are a driving force behind the research being carried out on our decision-making competencies.

Since the establishment of the Harding Center in 2009, frontier research has been carried out there on risk perception and risk communication and their concrete applications. The aim of the Center, which is funded by a donation from London global investment manager David Harding, is to help people to better understand the risks they face every day and deal with them more competently. In today’s technological society, most people’s lack of confidence in dealing with risk has become a problem, and the extent of this problem remains largely unexamined.

This is demonstrated by the following examples of situations from Great Britain and Germany: When British newspapers reported that taking the birth-control pill increased the risk of thromboembolism (blocking of a blood vessel by a blood clot) by a 100 percent, many women panicked and stopped taking it. This emotional reaction resulted in unwanted pregnancies and an estimated 10,000-plus increase in abortions. The study in question had confirmed that of 7,000 women who did not take the pill, one suffered from a thromboembolism, and of 7,000 women who did take it, the number of women affected increased to two. The ability to differentiate between a relative risk (“100 percent”) and an absolute risk (“1 in 7,000”) is not part of general public education today.

In Germany, nation-wide mammography-screening was introduced. This test is not particularly reliable and often results in false alarms. Therefore, all doctors should inform their patients that out of ten women who test positively, only approximately one actually has cancer. As Gigerenzer showed, the majority of German gynaecologists incorrectly believe that nine out of ten women who test positively have cancer. This overestimation of the actual risk causes unnecessary fear and anxiety for patiences. Doctors are not efficiently trained in statistical thinking and risk assessment.

These examples show that general responses are often inadequate when it comes to responding to critical issues. The research at the Harding Center for Risk Literacy shows the importance of the ability to understand information and to interpret statistics correctly as these competencies are the basis for having the courage to make an informed decision for ourselves.