How to properly assess risks..

Just read an interesting study all about how people define and perceive risk.

The results demonstrated that in general, people tend to regard propositions that they do not properly understand as more risky, regardless of their intrinsic risk, and to regard things that they do understand as less risky, again regardless of the intrinsic risk.

This explains why some people find it hard to seize relatively low risk opportunities placed right in front of their noses. Strange as it may seem, they may see these opportunities as risky propositions, even in the face of contrary evidence, simply because they do not fully understand how they came about, what they are based on, or what they mean.

Similarly, they may regard investment in predictable, understandable situations or pre-existing circumstances as 'safe', even when those situations are actually untenable in the longer term and may have high levels of instrinsic risk.

Obvious? Maybe.... Interesting? - I think so.

I wonder if it applies to other situations and circumstances beyond the business world?

As an old Yorkshire saying goes... "there's nowt so strange as folk"...