{"id":553333,"date":"2022-09-02T07:00:51","date_gmt":"2022-09-02T07:00:51","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2022\/09\/02\/how-our-brains-process-risk\/"},"modified":"2022-09-02T07:00:51","modified_gmt":"2022-09-02T07:00:51","slug":"how-our-brains-process-risk","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2022\/09\/02\/how-our-brains-process-risk\/","title":{"rendered":"How our brains process risk"},"content":{"rendered":"<p><strong>Risks are all around us. How we perceive and respond to them is pretty <\/strong><strong>subjective: <\/strong>Our judgment calls on risk are just as complex and contradictory as human cognition \u2014 and the way most of us evaluate risk is far from rational, no matter how objective we claim to be. A mix of nature and nurture shape our perceptions and responses to risk in every area of life\u2014sometimes with potentially dangerous consequences.<\/p>\n<p><strong>So how do we evaluate risk? <\/strong>We each filter data on how risky an action might be through our own belief and value systems \u2014 and those values are in turn shaped by the societal and cultural context in which we were raised.<\/p>\n<p><strong>The debate over vaccines is a prescient example<\/strong>: People with a pre-existing mistrust of government or big pharma perceive the risks associated with vaccines as greater \u2014 and the risks of contracting the diseases they prevent as lower \u2014 than the average person, studies (<a href=\"https:\/\/www.ncbi.nlm.nih.gov\/books\/NBK233844\/\">here<\/a> and <a href=\"https:\/\/www.sciencedirect.com\/science\/article\/pii\/S0264410X15005010\">here<\/a>) show.<\/p>\n<p><strong>Some of us just want to look on the bright side: <\/strong>Risk perception can be riddled with what researchers call <a href=\"https:\/\/www.cnbc.com\/2020\/10\/22\/why-optimism-bias-could-be-unhelpful-in-a-pandemic-say-psychologists.html\">optimism bias<\/a>. Optimism bias isn\u2019t just thinking good things are more likely to happen than bad things \u2014 it\u2019s thinking that good things are more likely to happen *to you*, while bad things are more likely to happen to others. During the pandemic, most people surveyed judged themselves to be at a <a href=\"https:\/\/www.ucl.ac.uk\/news\/2020\/may\/people-are-optimistic-about-own-covid-19-risk-pessimistic-about-society\">lower risk of getting covid<\/a> than the average person \u2014 a dangerous risk assessment misstep born of optimism bias.<\/p>\n<p><strong>But the opposite is also true: <\/strong>Judgment calls on risk can also skew overly pessimistic, especially when people become hyper aware of dangers. Humans have a tendency to make decisions based on what jumps out to us in our minds, i.e. memorable events, things we see and read about a lot, or things that happened recently. This tendency \u2014 known as the <a href=\"https:\/\/thedecisionlab.com\/biases\/availability-heuristic\">availability heuristic<\/a> \u2014 can cause people to over-exaggerate risk of a certain event if they have <a href=\"https:\/\/oxfordre.com\/communication\/view\/10.1093\/acrefore\/9780190228613.001.0001\/acrefore-9780190228613-e-283#:~:text=Risk%20perception%20refers%20to%20people%27s,how%20they%20deal%20with%20them\">previous experience<\/a> of it happening in their immediate surroundings or they\u2019ve been exposed to heavy <a href=\"https:\/\/www.nature.com\/articles\/s41398-022-02048-z\">media coverage<\/a> of it.<\/p>\n<p><strong>There are dozens of cognitive biases that inform our view of the world and the risks it holds: <\/strong><a href=\"https:\/\/www.nytimes.com\/2020\/06\/30\/smarter-living\/why-youre-probably-not-so-great-at-risk-assessment.html\">Exposure therapy<\/a> has long been used by psychologists to help people confront their fears in small doses. But exposure to danger has also been found to reduce people\u2019s perception of risk \u2014 for better or worse \u2014 in non-clinical settings. The more we do something, the less it worries us, leading risky behaviors to become normalized. This is also linked to other cognitive shortcuts like confirmation bias, which can see people downgrade their perception of risk based on a few incidents where they took a risk that turned out fine.<\/p>\n<p><strong>How to counter your irrational thinking on risk? Pay attention to the facts \u2014 but accept that how much risk you can handle is ultimately a personal call. <\/strong>Yes, you could do a rigorous assessment of all the available data on a given decision, weigh up the costs and benefits, and strategize for all the possible outcomes \u2014 and if you\u2019re weighing up a major life or business decision, we recommend that you do. But the reality is that we make countless split-second risk assessments every day. It\u2019s impossible to sort through the emotional, social, and neurochemical soup that informs that \u201cgut feeling\u201d for every single decision \u2013 and earth-shattering events are <a href=\"https:\/\/bigthink.com\/the-present\/predict-unpredictable-black-swan-events\/\">almost impossible<\/a> to predict anyway. The best you can do is trust your own boundaries when it comes to risk and accept that in this life, there is no such thing as a sure thing.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Risks are all around us. How we perceive and respond to them is pretty subjective: Our judgment calls on risk are just as complex and contradictory as human cognition \u2014 and the way most of us evaluate risk is far from rational, no matter how objective we claim to be. A mix of nature and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":553334,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9530],"tags":[2604,8360,2705],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-553333","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-risk-and-your-brain","tag-enterpriseyourwealth","tag-psychology","tag-risk-and-your-brain","wpautop","entry"],"acf":{"mongo_id":"2bb12d7b-cfaf-4cc9-bae7-6f3daa7cfc7c","is_powered_by":true,"story_type":"1","photo_url":"https:\/\/ent.news\/2022\/9\/439.jpg","photo_position":"above","related_issue":[553329],"teaser":"","voice_url":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>How our brains process risk - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2022\/09\/02\/how-our-brains-process-risk\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How our brains process risk\" \/>\n<meta property=\"og:description\" content=\"Risks are all around us. How we perceive and respond to them is pretty subjective: Our judgment calls on risk are just as complex and contradictory as human cognition \u2014 and the way most of us evaluate risk is far from rational, no matter how objective we claim to be. 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Thank your amygdala.","author":"enterpriseam admin","date":"15 June 2021","format":false,"excerpt":"There is a literal war waging inside our brains as we enter the new normal: With vaccine rollouts gaining steam worldwide and lockdown measures easing, people are being faced with an internal dilemma: return to the pre-pandemic way of behaving or take into consideration all the safety factors covid-19 has\u2026","rel":"","context":"In &quot;POST-PANDEMIC LIFE&quot;","block_context":{"text":"POST-PANDEMIC LIFE","link":"https:\/\/enterpriseam.com\/egypt\/category\/post-pandemic-life\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2021\/6\/501.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":553338,"url":"https:\/\/enterpriseam.com\/egypt\/2022\/09\/02\/can-thrill-seeking-be-good-for-you\/","url_meta":{"origin":553333,"position":3},"title":"Can thrill-seeking be good for you?","author":"enterpriseam admin","date":"2 September 2022","format":false,"excerpt":"There\u2019s nothing quite like a good thrill: Whether it\u2019s popping wheelies on the Ring Road or base jumping in the Alps, some people\u2019s idea of fun seems to come with a side-serving of extreme personal risk.Some athletes thrill-seek like it\u2019s their day job: There\u2019s no shortage of people around the\u2026","rel":"","context":"In &quot;RISK FOR THRILLS&quot;","block_context":{"text":"RISK FOR THRILLS","link":"https:\/\/enterpriseam.com\/egypt\/category\/risk-for-thrills\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2022\/9\/441.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":602880,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/04\/09\/egypts-banks-need-to-set-aside-additional-capital-for-credit-concentration-risks\/","url_meta":{"origin":553333,"position":4},"title":"Egypt\u2019s banks need to set aside additional capital for credit concentration risks","author":"enterpriseam admin","date":"9 April 2019","format":false,"excerpt":"New requirements from Central Bank of Egypt on management of portfolio concentration risk: Commercial banks are now required to set aside additional capital above the base requirement to hedge against concentration risk in their loan portfolios, according to new CBE guidelines (pdf). The ratio for each bank will depend on\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":572625,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/07\/01\/the-next-18-months-what-risks-lie-in-store-for-us\/","url_meta":{"origin":553333,"position":5},"title":"The next 18 months \u2014 what risks lie in store for us?","author":"enterpriseam admin","date":"1 July 2020","format":false,"excerpt":"What risks lie in store for us over the next 18 months? 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