Decisions, Decisions, Decisions

Let us consider Risk and Motivation. There are many definitions of the word “RISK” and the etymology is fascinating and illustrates the migration of meaning, as often  happens with words.  But I want to propose a particular definition that I think fits many applications today.  This is because “RISK”, or our assessment of it governs our behavior of extreme weather events.    Central  to this quasi-analytical approach is the fact that even if we can quantify risk, each of us will have a different analysis of it.

For and event, “E”,  I will define the RISK FACTOR as

E =  (probably of a bad outcome X cost of the bad outcome) / (probability of good outcome  X value of the good outcome)

The MOTIVATIONAL  FACTOR might be formulated as  1/E, or 1/(RISK FACTOR).

In other words, a very low RISK FACTOR  would yield a high MOTIVATIONAL FACTOR  for a particular course of action.

Let us examine this.  If the bad outcome is really bad (like death), then, even if it is improbable, most of us are really cautious, and the risk would be high and the motivation for that behavior very low.   An example of this would be “Russian Roulette”, no matter how many chambers the gun has.   Now,  what lowers the Risk FACTOR is the potential benefit or a decrease in probability of a bad event.  We cross the street, drive a car, fly in an airplane because getting from point A to B is of sufficient value to us that we risk the possible accident.  During the earliest days of the AIDS disease, when the perception was that it was a certain death sentence, and that unprotected sex with an unknown partner could put you had high risk, then the health community was somewhat effective in modifying behavior because the RISK FACTOR was presumed to be high.  More recently, more complacency  may have developed, not because the denominator has changed ( the motivating factors), but because the disease is perceived to be better controlled and the probability of a bad outcome has been reduced.

Recent events with Toyota and unintended acceleration also illustrate the point.  The ratio compares good gas mileage vs  crashes.  The company’s advertising is directed on shaping public opinion that the probability of the bad outcome is next to zero now, the the RISK FACTOR is low.

When an oil company prospects for oil, they explicitly evaluate the above formula, each term.  Whether they drill or not may be if the RISK FACTOR is .5 or lower.

We can figure out exactly what the value of the RISK FACTOR is and some of us would buy a Prius and some of us would not, depending out what level of RISK FACTOR each of us accepts.  I would go into a hurricane or tornado – others would not.   However, neither of us would accept being struck by a lightning bolt, but there are those (dearly departed) who willingly accepted that known RISK FACTOR.

Let us examine this in light of hurricane evacuation notices, and how we respond to them.  It runs the spectrum.  There are those who leave with no prompting, just to avoid ANY chance of something bad happening.  It comes, however with a cost.  Their lives are disrupted; it costs money to leave; their homes are unprotected, etc.   BUT, they will not get washed away, for sure.

Then there are those would never leave.   They believe the bad outcome is either exaggerated or that the likelihood is exaggerated.   The government has a RISK ASSESSMENT factor that is employed, and it, as often the case, is focused on the numerator.  The Government simply put, has a very low (relative term) RISK FACTOR tolerance.  I believe this is because people are even relieved if they evacuate and nothing bad happens.  This is compared to if they are not warned, and something bad happens, then the only happy people are lawyers.   But they and we all make MANY decisions every day based on an innate or conscious calculation of  RISK FACTORS.

These are serious assessment we make in life.  When to drink, how much to drink, etc.   In the event of a hurricane, it is, for example, a nursing home that believes that they would lose 3 patients if they evacuate everyone,  and if they do not evacuate and the storm surge is bad enough,  they could lose 3 or 10 people.  If no surge, then zero.  Does it make a difference if the loss is 3 or 10, or zero if they do not evacuate?  These are real decisions.  This actually happened in New Orleans, and in at least some cases, the decision  not to move was the wrong one.

My point is that often unconsciously, we all, every day, make a calculation of the RISK FACTOR in most of the things we do. The choice of the things we do (motivational factor) is becasue the benefit we perceive is enough greater than the cost (in terms of time, money, effort etc).