New “risk intelligence test” is a disappointment

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Imagine my surprise, last week, when I read a report announcing that researchers in Germany had created “the first quick test for establishing an individual’s risk intelligence.” After all, I created an online risk intelligence test back in 2009, and I was simply following in the tracks of many researchers before me. What was so special about the new test from Germany, I wondered.

The answer, as I soon found out, is … nothing! In fact the test doesn’t measure risk intelligence at all. To be fair, the authors of the test do not pretend that it does. They claim, instead, that the test measures what they call “risk literacy.” It seems the journalists used poetic license when they described it as a risk intelligence test.

The test is certainly quick. There are only four questions, and it takes only a couple of minutes to answer them. But the questions are the same old probability puzzles that have been the mainstay of books about risk for decades.

For example, one of the questions is as follows:

Out of 1,000 people in a small town 500 are members of a choir. Out of these 500 members in a choir 100 are men. Out of the 500 inhabitants that are not in a choir 300 are men.

 What is the probability that a randomly drawn man is a member of the choir?

Many books that purport to help people think more clearly about risk focus on such analytical puzzles. But although these puzzles can be fun to explore and their solutions are often pleasingly counterintuitive, mastering probability theory is neither necessary nor sufficient for risk intelligence. We know it is not necessary because there are people who have very high risk intelligence yet have never been acquainted with the probability calculus. And mastering probability theory is not sufficient for risk intelligence either, as is demonstrated by the existence of nerds who can crunch numbers effortlessly yet show no flair for estimating probabilities or for judging the reliability of their predictions.

Risk intelligence is not about solving probability puzzles; it is about how to make decisions when your knowledge is uncertain. Outside of some highly structured risk-taking activities, such as are found in casinos and financial markets, dealing with uncertainty is a more useful skill than probability analysis. It is also much easier to learn, primarily because it depends on common sense and simple logic rather than abstract mathematics.

It is depressing to find people still confusing these two things. The journalists who have been waxing lyrical about the German test would do well to read Agatha Christie. Fifty years ago, in The Mirror Crack’d from Side to Side, she showed her disdain for the kind of probability puzzles that the German test regurgitates, when she has Dr Haydock complain: “I can see looming ahead one of those terrible exercises in probability where six men have white hats and six men have black hats and you have to work it out by mathematics how likely it is that the hats will get mixed up and in what proportion. If you start thinking about things like that, you would go round the bend. Let me assure you of that!

Risk intelligence and negative capability

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The term risk intelligence or RQ has only emerged in recent years. Although the phrase is new, however, the concept is prefigured in Keats’ idea of negative capability – how much mystery uncertainty or doubt a person can handle without getting an irritable reaction.

From a psychoanalytic perspective, these irritable reactions are the unleashed by the unconscious to protect the ego from emotional shock when it is too weak to deal with reality. Like anger, which blows out the light in the mind, these tremors also disrupt the flow of light in the mind.

This alternative reality presented by the ego then distorts the person’s ability to assess the extent of their knowledge and therefore to estimate probabilities.

It could be argued that selflessness or egolessness all else being equal should improve a persons risk intelligence. However, this is rather simplistic and misses the positive elements of high risk intelligence such as determination - not taking setbacks personally, but seeing how they can be overcome to reach the goal. 

Risk intelligence is not just about avoiding the negatives; it’s also about embracing the positives.  Risk intelligence is the new and natural arena for the bringing together and merging of numerous concepts. By drawing on both contemporary and historical approaches, we may not only to better understand astute risk takers, but will also become more astute risk takers ourselves.

Friday 13th and the “Hound of the Baskervilles effect”.

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Oh dear, it’s Friday 13th today! Whether you are superstitious or not, you can’t help but notice this combination of day and date because it is so marked in cultural consciousness as being unlucky. You might not care about the number 13, black cats or any other superstition but as a risk intelligent person are you wondering whether drivers will be just a little more anxious than normal today? Or if important meetings will sour halfway through if the collective mood of the nation is punctuated with unease?

Perhaps, however, you are in China as you read this, where no one cares it’s Friday 13th. But did you notice any malaise in the ether on the fourth day of this month if you were there? Or in Japan? In Mandarin, Cantonese and Japanese the words “four” and “death” are pronounced almost identically. So despised is the number 4 in these countries that mainland Chinese omit the number 4 in designing military aircraft and some Chinese and Japanese hospitals do not list a fourth floor or number any rooms with 4. Multiply that dislike by nearly 1.5 billion people and it becomes worth asking what noteworthy effects the fear of number 4 might have. Can believing in superstition even be dangerous enough to hasten a stress-related death, such as the heart attack that kills Charles Baskerville in Sir Arthur Conan Doyle’s classic novel The Hound of the Baskervilles?

A group of Western and Chinese academics undertook research to ask precisely this question. Their objective was to determine ‘whether cardiac mortality is abnormally high on days considered unlucky’ and they did this by examining the numbers of cardiac and non-cardiac mortalities on or around the fourth of each month in groups of Chinese and Japanese people based in the US. Interestingly they found that cardiac deaths for Chinese and Japanese people peaked on the fourth of each month – the peak being particularly large for those with chronic heart disease. The study was done in the US with a non-Asian control group but the peak on the fourth of each month was particularly noticeable in California which has a high Asian and American-Asian population. Of course the number 4 itself isn’t dangerous the way a heart attack is but believing it to be gives it an indirect but quantifiable power, which is what these academics are suggesting.

The risk intelligent course of action would be to rationally acknowledge that numbers, even ones that sound like words, are just numbers and must be used as such. But to do away with superstition is to do away with deep-rooted parts of our cultural psyche, wherever we are from. Plus we may not be able to shrug them off at all. You can emigrate to a new life in the US but you can’t leave your fear of the number 4 neatly behind in China – as the cardiac statistics indicate. Also there are good traditions that would have to be thrown out if we treated all numbers the same, such as the Chinese belief that 8 is a lucky number and that cheques given as wedding gifts should contain as many eights as possible, ie £88.88. My guess is that our feelings about certain numbers are here to stay in some form or another, at least for the time being. Just don’t put a 4 on the cheque you give your Chinese friend on their wedding day.

 

Risk intelligence in Baalbeck

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Last week I went to see the Roman ruins in Baalbeck, Lebanon. I had wanted to visit Baalbeck ever since I arrived in Beirut two months ago, but had hesitated about going because I’d heard that the security situation there was dicey. Last year, seven Estonians were kidnapped in while cycling near Baalbeck, in the Bekaa Valley. Last month, the US Embassy in Lebanon sent an emergency message warning Westerners not to travel to the Baalbeck area because of clashes between the Lebanese authorities and local criminal groups. The latest clash erupted only last week, when three Lebanese Army soldiers were wounded during a shootout early Tuesday in the town of Baalbeck itself.Dylan in Baalbeck

Browsing online, however, I came across various traveller’s bulletin boards that told a slightly different story. One tourist noted, on 14 March, that they were with some friends in the Baalbeck ruins early the previous Sunday morning, when suddenly they heard lots of automatic arms fire in nearby, and also “heard what sounded like something whizzing across the sky above us, which was followed by a few very large explosions.” However, it seemed to start up and die off quickly and all at once so they assumed it was a military drill of some sort. The travellers didn’t seem that scared.

It’s important to take reporting bias into account when reading newspapers and searching online for security information. Journalists don’t file reports saying “nothing happening round here,” and tourists are far more likely to post something online when they hear gunshots than when they don’t. So it’s hardly surprising that a Google search for “Baalbeck warnings dangers” will turn up a bunch of scary stories.

One way of getting a better idea of the security situation somewhere new is simply to ask people who’ve been there recently. This way, you avoid giving too much weight to the self-selecting sample of those people who go to the trouble of writing about stuff. So last week I asked everyone I knew in Beirut if they had been to Baalbeck recently, and whether they thought it was dangerous. The overwhelming consensus was that it was fine.

Weighing up all the evidence I had gained from newspapers, online reports, and gossip, and taking into account the various biases that might distort these sources, I tentatively concluded that my chances of being shot or kidnapped in Baalbeck were minimal – low enough to constitute an acceptable risk. So my sister and I headed out there in one of the rickety minibuses that are the cheapest way of getting around in Lebanon, and for a few hours the following morning, we had the ruins to ourselves.

Risk intelligence and creativity

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Over the past few days a number of fashion designers have started following me on Twitter. Maybe it was just a coincidence, but whatever the reason was, it got me thinking about the role of risk intelligence in fashion, and in creativity more generally.

As my colleague at the American University of Beirut, Arne Dietrich, recently explained to me, creativity can be thought of as a product of two mental processes; one that generates new ideas, and another that evaluates these ideas. It is in the second of these processes that risk intelligence has a role to play.

Suppose a fashion designer is playing around with ideas for the next season. As new images flash across her imagination, she covers the pages of her sketch pad with simple line drawings. Then she puts down her pencil and reviews the designs she has generated. When evaluating these patterns, she will consider a range of criteria, some conscious and some implicit; her own aesthetic preferences, current trends in the fashion industry, technical aspects of production, and the likelihood that a given design will be unusual enough to get noticed and yet not so weird that it will never be worn.

Estimating that likelihood requires risk intelligence. A designer with low risk intelligence may overestimate the chance that a particular pattern will be a hit, or underestimate the probability that  a given design will catch on. A designer with high risk intelligence, however, will tend to get it just right, regularly providing realistic estimates of each new piece’s chances of becoming the must-have item of the season.

Good fashion designers construct mental models of what makes a good design slowly, often unconsciously, as they gradually accumulate experience.  These models may involve many different variables – the shape of the hemline, the way the folds fall, the texture of the material, and so on.  People with high risk intelligence manage to keep track of all these variables in their heads, but the process is unconscious; they need not be mathematical wizards, since most of the cogitation goes on below the level of awareness.  It is here that the difference between an average designer and an Alexander McQueen lies. Anyone can brainstorm a diverse range of crazy patterns; only a skilled designer can reliably pick out the ones that will sell.