How many of us bet from the heart rather than realistically?
Don’t get fooled into thinking that your anxiety level should be the factor that helps you make the final decision about risk. Your feelings may be very unreliable. The more emotional you feel, the less logical your thoughts will be. Increase your rational thoughts about the risk you’re facing to balance out your emotional reaction.
If you’re going to take a risk, especially one that could possibly involve your well-being, wouldn’t you want the odds in your favor? However, most people choose the option that will cause them the least amount of anxiety. Pay attention to the thoughts you have about taking the risk and make sure you’re basing your decision on facts, not just feelings.
A lot of research shows that we are pretty bad at accurately calculating risk. Frighteningly, many of our major life decisions are based on complete irrationality. Here are a few ways that happens:
1. We Incorrectly Judge How Much Control We Have Over A Situation
We’re usually more willing to take bigger risks when we think we have more control. Most people feel more comfortable when they’re in the driver’s seat of a car for example, but just because you’re in the driver’s seat doesn’t mean you can avoid an accident.
2. We Overcompensate When Safeguards Are In Place
We behave more recklessly when we think there are safety nets in place, and ultimately, we increase our risk. People tend to speed more when they wear their seat belts. And insurance companies discovered that increased safety features on cars actually correlated with higher accident rates.
3. We Don’t Recognize The Difference Between Skill And Chance
Casinos have discovered that when gamblers play craps, they roll the dice differently depending on what type of number they need to win. When they want to roll a high number, they throw the dice hard. When they want a small number, they roll the dice softly. Even though it’s a game of chance, people behave as if it involves some level of skill.
4. We Become Easily Deluded When We See A Potentially Large Payoff
Even when the odds are stacked against you, if you really like the potential payoff, like in the lottery for example, you’ll likely overestimate your odds of success.
5. We Grow Comfortable With Familiarity
The more often we take a risk, the more we tend to miscalculate how big of a risk we’re actually taking. If you take the same risk over and over again, you’ll stop perceiving it as risky. If you speed on your way to work every day, you’ll greatly underestimate the danger you’re putting yourself in.
6. We Place A Lot Of Faith In Other People’s Abilities To Perceive Risk Accurately
Emotions can be contagious. If you’re in a crowd of people who don’t react to the smell of smoke, it’s likely you might not sense much danger. In contrast, if other people begin to panic, you’re much more likely to react.
This is NOT my thoughts/article, just something to ponder over considering what we do on this site.
Guessing has never been widely acclaimed as a good gambling strategy.
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