Life is a collection of risks. While their analysis carries a major importance, it remains, to a large extent, a subjective exercise, one in which perception plays a key role.
Risk is the child of uncertainty, as all future is.
Common errors in perceiving the extent of risk are numerous:
- The belief that the future is a continuous of the past tends to blot out new types of risks
- Neglecting the effect of the occurrence of a risk. High-probability risks may have only a reduced effect while low-probability risks may have very large effects
- The perception of risk is influenced by the social and cultural context
- The risk-propensity of the decision-maker, with over-confidence being a dangerous attitude
- Lack of information.