Meditations and Learnings

Meditations and Learnings

Risk Homeostasis

Like a thermostat, we maintain a certain level of perceived risk.
If we aim to reduce risk in our lives, we must concern ourselves with how we might negate the benefits of our precautions.

Examples of risk compensation:
- Protective gear in sports - reckless behaviour
- Antilock breaks - more accidents
- Childproof caps - complacency with all medicines
- Banking protective mechanisms - financial crisis

Lessons:
- Make safety measures invisible
- Incentivise prudent behaviour
- Ignore intervention bias
- Compliment safety measures with new rules to prevent more risk-taking
- Make the risks visible - perceived safety is dangerous