Risk perception Risk perception is the subjective judgement that people make about the characteristics and severity of a risk. At its most basic, the perception of risk is an intuitive form of risk analysis. Adults have an intuitive understanding of risk, which may not be exclusive to humans. Many ancient societies believed in divinely determined
fates, and attempts to influence the gods can be seen as early forms of risk management. Early uses of the word 'risk' coincided with an erosion of belief in divinely ordained fate. Notwithstanding, intuitive perceptions of risk are often inaccurate owing to reliance on
psychological heuristics, which are subject to systematic
cognitive biases. In particular, the accuracy of risk perception can be adversely affected by the
affect heuristic, which relies on emotion to make decisions. The
availability heuristic is the process of judging the probability of an event by the ease with which instances come to mind. In general, rare but dramatic causes of death are over-estimated while common unspectacular causes are under-estimated; an "
availability cascade" is a self-reinforcing cycle in which public concern about relatively minor events is amplified by media coverage until the issue becomes politically important. Despite the difficulty of thinking statistically, people are typically subject to the
overconfidence effect in their judgements, tending to overestimate their understanding of the world and underestimate the role of chance, with even experts subject to this effect. Other biases that affect the perception of risk include
ambiguity aversion.
Paul Slovic's "
psychometric paradigm" assumes that risk is subjectively defined by individuals, influenced by factors such as lack of control, catastrophic potential, and severity of consequences, such that risk perception can be psychometrically measured by surveys. Slovic argues that intuitive emotional reactions are the predominant method by which humans evaluate risk, and that a purely statistical approach to disasters lacks emotion and thus fails to convey the true meaning of disasters and fails to motivate proper action to prevent them. This theory has received support from
retrospective studies and evolutionary psychology. Hazards with high perceived risk are therefore, in general, seen as less acceptable and more in need of reduction.
Cultural theory of risk views risk perception as a collective phenomenon by which different cultures select some risks for attention and ignore others, with the aim of maintaining their particular way of life. Hence risk perception varies according to the preoccupations of the culture. The theory outlines two categories, the degree of binding to social groups, the degree of social regulation. Cultural theory can be used to explain why it can be difficult for people with different world-views to agree about whether a hazard is acceptable, and why risk assessments may be more persuasive for some people than others. However, there is little quantitative evidence that shows
cultural biases are strongly predictive of risk perception.
Decision theory In
decision theory, regret (and anticipation of regret) can play a significant part in decision-making, distinct from
risk aversion.
Framing is also a fundamental problem with all forms of risk assessment. In particular, because of
bounded rationality, the risk of extreme events is discounted because the probability is too low to evaluate intuitively. As an example, one of the leading causes of death is
road accidents caused by
drunk driving – partly because any given driver frames the problem by largely or totally ignoring the risk of a serious or fatal accident. The right
prefrontal cortex has been shown to take a more global perspective, while greater left prefrontal activity relates to local or focal processing.
Reference class forecasting is a forecasting method by which biases associated with risks can be mitigated.
Risk taking Psychologists have run randomised experiments with a treatment and control group to ascertain the effect of different psychological factors that may be associated with
risk taking, finding that positive and negative feedback about past risk taking can affect future risk taking. For example, one experiment showed that belief in competence correlated with risk-taking behavior.
Risk compensation is a
theory that suggests that people typically adjust their
behavior in response to the perceived level of risk, becoming more careful where they sense greater risk and less careful if they feel more protected. People also show
risk aversion, such that they reject fair risky offers because of the
perception of loss. Further, intuitive responses have been found to be less risk-averse than subsequent reflective response.
Sex differences ==Philosophy of risk==