Risk and Uncertainty
People often confuse risk with uncertainty. But the terms "risk" and "uncertainty" do not refer to the same thing.
- Risk is precise and quantifiable.
- Uncertainty is when the underlying system is not understood.
The more you understand a system, the more able you are to convert uncertainty into risk.
205
1.15K reads
CURATED FROM
IDEAS CURATED BY
The idea is part of this collection:
Learn more about problemsolving with this collection
How to prioritize self-care in the workplace
How to adapt to new work arrangements
How to maintain work-life balance
Related collections
Similar ideas to Risk and Uncertainty
Risk and uncertainty
- Risk is when the factors that determine success or failure are out of your control, but the odds of success are known.
- Uncertainty is when the factors that determine success or failure are not out of your control but are simply unknown. It is play...
Risk and Arrogance
Once you understand a system, you can change some risk into uncertainty. Sometimes you can do this completely, but other times you can limit your range of uncertainties to a calculable level.
More knowledge allows you more controlled risk. However, sometimes, peopl...
Uncertainty and Framing
The prospect theory shows that people are often willing to make riskier decisions to avoid losses than to make gains - even when the situation is identical but framed differently. For example, a 30% chance of death and a 70% chance o...
Read & Learn
20x Faster
without
deepstash
with
deepstash
with
deepstash
Personalized microlearning
—
100+ Learning Journeys
—
Access to 200,000+ ideas
—
Access to the mobile app
—
Unlimited idea saving
—
—
Unlimited history
—
—
Unlimited listening to ideas
—
—
Downloading & offline access
—
—
Supercharge your mind with one idea per day
Enter your email and spend 1 minute every day to learn something new.
I agree to receive email updates