Gerd Gigerenzer wrote Risk Savvy: How To Make Good Decisions in the spirit of Nate Silver’s The Signal and The Noise, and Innumeracy by John Allen Paulos. These latter books propose a “How To Think” while also proposing that people should be taught to think differently, and stop making epistemological errors.
Distinct from The Signal and The Noise, however, Gigerenzer has a strong respect for the value of intuition, which Silver tends to discount in favor of a “1. Hypothesis, 2. Data, 3. Revised Hypothesis” pure rational approaches.
Gigerenzer helpfully suggests that in a complicated world of high uncertainty, the best we can do may be to radically simplify our analysis by using rules of thumb. He’s proposing this in the face of a modern trend to build increasingly complex models for analysis, which may lead us to miss the big picture of uncertain risks.
Also distinct from The Signal and The Noise, I found Risk Savvy mostly tedious. It felt like an extended book version of anecdotes delivered to business school students or physicians or pharmaceutical executive retreats, and that’s not a good thing.
Gird covers a wide range of decision-making situations, from health-care to restaurant menus to investments and romance. I read the investments section carefully, intrigued by the promise of one subchapter: “How To Beat a Nobel Prize Portfolio.”
His conclusion – use simple rules of thumb and eschew complexity – obviously appeals to me when it comes to investments. His explanation of a “mean-variance portfolio” from Nobel Prize winner Markowitz, and a comparatively better and simple portfolio known as “1/N” is terrible. He explains neither portfolio well, but glosses over what either of these would look like. Up until that point in the book, I had wondered what explained my simultaneous confusion and boredom by Gigerenzer’s book.
After reading his investments section, I realized he’s bad at explaining important but complex topics, while at the same time inundating his audience with dumbed down anecdotes gathered from his lectures to business people who want complex-sounding concepts without real substantive explanations.
Like Malcolm Gladwell, but much less interestingly written.
Please see related post:
 I gather Gut Feelings built on Gigerenzer’s good fortune that Malcolm Gladwell’s drew upon Gerd Gigerenzer’s research on the value of intuition for his popular book Blink. I further gather that Gigerenzer has produced important research in the field, and that I’m reading the popularized version of Gigerenzer’s research.
 Gigerenzer frequently cites talks he’s given to these groups throughout the book. The “I was giving a lecture to this group…” doesn’t make for a compelling anecdote.
Post read (324) times.