How to make better decisions in a world full of uncertainty

Humans are terrible at making sense of risk. And in case you think that this doesn’t apply to you, you’re almost certainty wrong. Hassan Vally, Associate Professor, Deakin University, an expert in risk communication, talks us through the common traps we all fall into.

It doesn’t matter how smart or educated you are, or even how good you are with numbers, we all struggle to make sense of the risks we face in the modern world. We can blame this poor ability to judge risk on human evolution.

Our brains evolved to make sense of – and deal with – large, immediate, and tangible threats to health that we faced in prehistoric times.

In those days we were not at the top of the food chain. Therefore, it was particularly important that we were able to quickly understand and respond to critical threats, such as encountering a predator that had set its sights on eating us for dinner. Being able to assess these sorts of threats and take immediate action was often the difference between life and death.

The key issue is that the brain that served us well in prehistoric times has essentially remained the same, but the world has completely changed. The risks we face in the modern world are generally much smaller, less obvious and play out over the longer-term. This is quite different to the risks we faced in primitive times and means our brains are susceptible to errors in thinking and mental shortcuts called cognitive biases that skew our perception of these modern risks.

As described in the seminal book Thinking Fast and Slow by Daniel Kahneman, the way we make sense of risks is driven almost entirely by emotion and intuition, rather than by logic and rational thought.

Lessons from the pandemic

COVID-19 exposed just how poorly we understand risks and consequences. It wasn’t just the general public that had trouble making sense of risks, but also experts and governments.

There is perhaps no greater example of this than the differing interpretation of the threat that COVID posed at the beginning of the pandemic. Despite having access to much the same information – albeit with a high degree of uncertainty – assessments of the threat posed by COVID varied considerably between governments.

Governments that clearly understood the threat COVID posed reacted swiftly and decisively, saving countless lives. Those that misunderstood the threat, prevaricated, and delayed action saw huge numbers of potentially preventative deaths.

Understanding vaccine hesitancy

At the individual level, vaccine hesitancy during the pandemic underlined how the misperception of risks led to potentially devastating outcomes.

In the United States alone it has been estimated that hundreds of thousands of deaths could have been prevented in the first year of the vaccine rollout if it were not for vaccine hesitancy.

Much of this hesitation stemmed from misunderstandings about risk. Those who were vaccine hesitant during the pandemic, and in fact those that are vaccine hesitant generally, put extra weight on the risks of rare side effects of vaccination and underweighted the enormous benefits of vaccination. This misperception was largely driven by in-build cognitive biases. 

Importantly, cognitive biases can be exploited by bad-faith actors spreading misinformation. These actors have a deep understanding of these biases and know how to promote them. In addition, they are incredibly skilled at taking advantage of the modern information ecosystem to ensure that their deceptive messaging spreads widely and has maximum impact.

Danger, danger

Rare reports of severe vaccine side effects stick in our mind and make them seem more likely than they actually are. This is due to a cognitive bias called the “availability heuristic”.

The more dramatic an image, the more it stands out in our minds. Bad-faith actors understand this all too well. They know that the dissemination of images of people suffering from vaccine side effects (even if they are fake) have an emotional impact which amplifies fear.

Then there’s the psychological phenomenon of people being more comfortable with unfavourable outcomes that arise from not taking an action than from taking an action. This important driver of vaccine hesitancy is called “omission bias”.

That is, an adverse outcome from taking a vaccine, regardless of how unlikely or mild this is, is much less acceptable to individuals than not taking a vaccine and experiencing adverse outcomes. This seems to hold true even when the potential consequences of inaction are life-threatening and far more serious than potential outcomes from taking action.

Another cognitive bias is that we are wired up to fear losses more than equivalent gains, so “loss aversion” also contributes to vaccine hesitancy. For many, the potential side effects of taking a vaccine are interpreted as a loss, while benefits are seen as uncertain, potential future gains and are not weighted as heavily in decision making.

Together, these and other cognitive biases are powerful drivers that mislead us and cause us to misunderstand the risk benefit equation when it comes to vaccines.

99.9999% safe

The way vaccine risks are framed can also greatly influence decisions made by individuals. During the pandemic many individuals were overly concerned about the low risk of potential severe side effects from COVID vaccines because they were almost exclusively framed in a negative way.

A severe vaccine side effect that may have been estimated to have a likelihood of 1 in a million draws attention to the ‘1’ person that may experience these side effects. However, framing this risk positively has the potential to be transformative in the way these side effects are perceived. A 1 in a million chance of severe side effects means that 999,999 people out of a million do not experience any of these side effects or in other words the vaccine is 99.9999% safe.

Context matters

Probabilities are an abstraction and are hard for our brains to make sense of. One way to better understand risks and make them less abstract is to contextualise them.

For example, many people have a fear of flying, even though they understand that flying is one of the safest ways to get around statistically. The lifetime risk of dying in a plane crash is approximately 1 in 10 million, which by any reckoning is an incredibly small likelihood.

Comparing the risks of flying to the risks associated with driving – another relatable mode of transport – can help. Though the numbers can vary depending on how you do these calculations, flying can conservatively be estimated to be at least 100 times safer than driving.

The comparison of driving and flying in this instance is particularly useful as we are comparing two similar activities: that is, common methods of transport. However, when there’s no obvious comparator, we can sometimes use other familiar risks as comparators.

Being struck and killed by lightning is one of these often-used comparators when dealing with low likelihood events. This tends to work well as lightning is something that is familiar and relatable to all of us, and furthermore, the likelihood of being killed by a lightning strike in any one year is generally considered to be the convenient number of approximately 1 in a million.

Consequently, if we compare the risk of being killed by lightning and the risk of dying in a plane crash, it yields the useful statistic that your annual risk of being killed by lightning is 10 times higher than your lifetime risk of dying in a plane crash. And yet, most people don’t spend their lives fearing being killed by a lightning strike. This comparison offers an additional useful frame of reference further highlighting how safe flying is.

Make better decisions

The most important lesson in understanding our brains when it comes to risk is to not blindly trust our gut reactions.

Our perception of risks can be distorted, so we need to question the strong gut reactions we often have to the risks we face in the modern world.

Here are 4 things you can do to help make better decisions:

1. Be aware of biases

The main drivers of distorted perception are cognitive biases, such as the availability heuristic, omission bias and loss aversion. Just being aware of the existence of these and other cognitive biases can help us take a step back and question our instincts and think more deliberately.

• Compare and contrast risks

Contextualising risks is also important to help us make sense of them. Comparing different risks (like comparing flying to driving) can assist us to give meaning to them and put them into perspective to make better decisions.

• Paint a picture

Seeking out visual representations of risks can be incredibly useful in assisting us to provide context and meaning to risks. The brain is better at processing visual information than abstract numerical data, so even simple visualisations or graphs can be powerful aids to understanding risks better.

• Understand the risk-benefit equation

Most decisions involve trading off the likelihood of adverse outcomes against the likelihood of beneficial outcomes, and truly understanding risk involves considering both sides of this equation. Since eliminating risk completely is rarely possible in the real world, the goal is generally to minimise harm whilst maximising benefit.

The personal perspective

In thinking about the way we make sense of risks, it’s also important not to underappreciate the personal perspective.

Making decisions based on risks often goes beyond the simple numerical reconciling of risks and benefits and is often complex and nuanced. Factors such as individual experiences, cultural values, societal norms and even ethical considerations all shape how we interpret and respond to risks.

During the pandemic many younger people made the decision to be vaccinated despite having a low risk of severe illness. This decision was largely driven by the consideration of the broader benefits of being vaccinated for their families and communities.

Another factor in this equation is the understanding that individuals have different levels of risk tolerance, which is the degree of uncertainty which they are willing to accept when making decisions.

An individual’s risk tolerance is a deeply personal characteristic and is based on a range of factors, including personality, experience and personal circumstances.

Acknowledging these differences is incredibly important when trying to make sense of people’s decisions when it comes to risk. It encourages more empathy and understanding when trying to make sense of their decisions. It may help explain why what seems to be a rational choice for one person might not feel the same for someone else.

Questioning ourselves

Making sense of risks involves having a greater appreciation of just how difficult it is to make sense of the risks we face in the modern world and an understanding of our limitations. By questioning our intuitive reactions, recognising the cognitive biases that distort our perceptions, and placing risks in proper context, we can all aim to make more informed, thoughtful, and rational decisions in a world full of uncertainty.

Your brain needs rest to make good decisions